Review the FBT calculation

Overview

The system calculates the attributed FBT liability for the year based on the data entered across all four quarters. Once all relevant data has been imported and any required amendments have been made, the FBT calculation should be reviewed to ensure accuracy before finalising and completing the FBT return.

Key items to review

• Benefits
• Attribution
• Vehicles and drivers
• Sense checks
• Tax position
• Provision reports
• Settings

Benefits

Select the Workpapers tab > Benefits.

Check the Taxable% column for any percentages less than 100.00%. If any are located, investigate the cause and confirm that the benefits were added correctly. In some cases, benefits may have been disregarded for FBT calculation purposes. Make any necessary amendments.

Select the Reports tab > Benefits by Quarter.

Ensure the same benefit categories (types) appear in each quarter, and confirm that benefits have been added to all quarters. Missing data in any quarter will be easily identifiable. If a quarter is missing data, return to that quarter and import the necessary information.

Attribution

Select the Workpapers tab > Attribution.

When reviewing the Quarter 4 calculation, ensure that a Gross cash pay amount is recorded for every employee. If any amounts are missing, these will need to be corrected, as it is uncommon for an employee to receive a benefit without also receiving a salary. Missing gross cash pay will result in an incorrect FBT calculation.

If you have a lot of data, select the Gross cash pay column header to sort the employee list by gross cash in ascending order. This will bring employees with blank or zero amounts to the top of the list. Reconcile these records with your source data.

Vehicles and drivers

Select the Workpapers tab > Vehicles.

Ensure each vehicle has a Schedule 5 amount (unless it has been disregarded). If this amount is missing, investigate and resolve.

For example, when a vehicle is first added using the Cost method, the system calculates the Schedule 5 amount based on the recorded cost. If the method is later changed to Tax book value method, but the tax book value isn't entered, the system cannot calculate the Schedule 5 amount. The tax book value must be entered manually; it is not calculated automatically.

Select the Workpapers tab > Vehicle Analysis / Driver Analysis.

Use the Vehicle Analysis and Driver Analysis reports to identify any issues—such as duplicate drivers or significant variances—and resolve them as needed.

Sense checks

Select the Workpapers tab > Sense Checks.

The system runs sense checks automatically. If the system identifies any exceptions, select the sense check to review it, and make any necessary adjustments.

Tax position

Select the Tax Position tab > Quarter 4 tab.

Ensure the Q4 True-Up is complete and that all figures match those submitted in the final returns to Inland Revenue.

Provision reports

Select the Reports tab > Cost Centre Reporting / Benefits by Quarter / Benefits by Year.

Review the FBT Provision reports for any items that require attention or to identify any unusual variances.

Settings

Select the Settings tab > Settings.

FBT return settings are typically configured at the beginning of the year to meet the needs of the entity. However, they should also be reviewed at year-end to confirm the correct return type and FBT rates have been selected.