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Changes to the small business entity turnover threshold have now been reflected in the ATO’s fringe benefits tax guide for employers.
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FBT guide updated following small business turnover increase
09 December 2020
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Chapter 20 of the ATO’s Fringe benefits tax – a guide for employers has now been updated to reflect the increase of the small business entity turnover threshold from $10 million to less than $50 million per annum.
As such, from 1 April 2021, businesses with an aggregated turnover of less than $50 million will be exempt from the 47 per cent fringe benefits tax on car parking benefits provided to employees if the parking is not provided in a commercial car park.
Likewise, multiple work-related portable electronic devices provided to employees will be exempt from FBT — even if the devices have substantially identical functions.
The increase to the small business entity turnover threshold to less than $50 million was announced in the October federal budget, allowing more entities to access 10 tax concessions that were previously available only to entities with a turnover of under $10 million.
From 1 July 2020, these newly eligible businesses can immediately deduct certain start-up expenses, such as professional, legal and accounting advice; and certain prepaid expenditure where the payment covers a period of 12 months or less that ends in the next income year.
From 1 July 2021, eligible businesses will be able access simplified trading stock rules, remit pay-as-you-go (PAYG) instalments based on GDP adjusted notional tax, and settle excise duty and excise-equivalent customs duty monthly on eligible goods.
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Eligible businesses will also have a two-year amendment period apply to income tax assessments for income years starting from 1 July 2021, a reduction from the current four-year amendment period.
In addition, from the next financial year, the Commissioner of Taxation’s power to create a simplified accounting method determination for GST purposes will be expanded to apply to businesses below the $50 million aggregated annual turnover threshold.
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