Fringe Benefits Tax (FBT) can be one of the most frustrating compliance obligations for Australian businesses and accounting firms alike. With the ATO’s enhanced data-matching capabilities and deeper FBT audits, there’s increasing pressure to get it right while maintaining efficient client service.
This guide outlines a practical framework that transforms the traditionally messy FBT process into a streamlined workflow, benefiting both accounting firms and their clients.
The FBT Challenge
Let’s face it—tracking down car logs, salary packages, and entertainment expenses is time-consuming and prone to errors. The back-and-forth with clients can drag on for weeks, putting pressure on your team and increasing the risk of missed deadlines.
With the right systems in place, you can:
- Eliminate repetitive manual processes
- Automate client follow-up and document collection
- Create protective documentation trails
- Seamlessly integrate with your existing practice management systems
Your 5-Step FBT Transformation Framework
Step 1: Set Up Your Internal FBT Process
Purpose: Establish clear responsibilities and workflows before FBT season begins.
Implementation:
Define team roles:
- Admin: Distribute Smart Links/Fetch Forms and track responses
- Client Manager: Handle technical queries and client follow-up
- Partner: Review critical decisions and final sign-off
Create your tracking dashboard:
- Set up a Project View for real-time progress tracking
- Configure integration with your practice management system (XPM/FYI/etc.)
- Establish colour-coded status indicators (Not Started/Awaiting Client/In Progress/Complete)
Set critical timelines:
- Fetch Forms distribution: By 29 March 2025
- First follow-up for non-responses: +7 days after distribution
- Final notice to non-respondents: +14 days after distribution
- Internal processing deadline: Minimum 2 weeks before lodgement
Step 2: Engage Clients With Smart Forms
Purpose: Quickly identify which clients require FBT services while making compliance easy.
Smart forms transform your client outreach by:
- Using plain-language questions that clients actually understand
- Showing only relevant follow-up questions based on previous answers
- Enabling document uploads directly within the form
- Automatically notifying your team when submissions are complete
Enhanced Email Template Example:
Subject: Quick action needed: Your 2025 FBT obligations made simple
Hi [First Name],
It's that time of year when the Australian Taxation Office (ATO) requires businesses to report on any fringe benefits provided to employees (for the year ending 31 March 2025).
We've simplified the entire process for you.
Instead of confusing paperwork, we've created a smart online questionnaire that:
- Takes just 5-10 minutes to complete
- Only asks questions relevant to your specific situation
- Guides you through exactly what documents to upload
- Helps protect your business from potential ATO penalties
Click below to complete your quick FBT check: [Complete Your 5-Minute FBT Check Now]
Not sure what counts as a "fringe benefit"? Common examples include:
- Work vehicles used privately by employees
- Certain entertainment expenses
- Employee loans or accommodation benefits
The questionnaire will help clarify these for your situation.
Need help? Reply to this email or call us directly on [phone number].
Regards,
[Your Name]Step 3: Convert Responses to Actionable Tasks
Purpose: Transform client data into structured workflow items.
Process Flow:
Initial Sorting:
- YES responses: Automatically flagged for full FBT assessment
- NO responses: Routed to nil return preparation queue
- UNCERTAIN responses: Flagged for immediate client manager follow-up
Documentation Review:
- Use a Document Checklist to verify all required supporting materials
- Missing documents trigger automated follow-up requests to clients
Workpaper Preparation:
- Generate pre-populated FBT workpapers directly from client responses
- Assign to appropriate team member based on complexity scoring
Schedule Critical Tasks:
- Set calendar reminders for method elections (50/50 split or 12-week register)
- Schedule final review dates and lodgement deadlines
Pro Tip: Configure your dashboard to display response statistics by client group, helping prioritise follow-up efforts.
Step 4: Strategic Client Follow-Up
Purpose: Secure responses from non-responsive clients.
The follow-up phase is critical—each day without client confirmation increases risk. Automation can maintain this process while keeping a personalised approach.
Enhanced Follow-Up Email Example:
Subject: Important: Your FBT deadline is approaching – Action required
Hi [First Name],
We recently sent you an important questionnaire regarding your Fringe Benefits Tax obligations for the year ending 31 March 2025.
Why this matters urgently:
The ATO has significantly increased audit activity in this area, using sophisticated data-matching to identify businesses that:
- Provide company vehicles to employees
- Hold staff functions or entertainment events
- Offer salary packaging arrangements
These potential fringe benefits require proper documentation—even if you ultimately have no FBT liability.
What happens if you don't respond:
- Potential ATO penalties starting at $550 per instance
- Disallowed tax deductions for benefit-related expenses
- Time-consuming audits that disrupt your business
The good news: Our smart questionnaire takes just 5-10 minutes and provides immediate protection.
[Complete Your FBT Check Now]
Still have questions? Call us directly on [phone] for immediate assistance.
Regards,
[Your Name]Step 5: Risk Mitigation Through Clear Disengagement
Purpose: Protect your firm with definitive documentation of client decisions.
Automated systems can generate appropriate disengagement notices based on client history and response patterns, ensuring complete protection.
For Previously Registered FBT Clients:
Subject: URGENT: Final notice regarding your FBT obligations
Hi [First Name],
Despite multiple attempts to contact you regarding your Fringe Benefits Tax obligations for the year ending 31 March 2025, we haven't received your response.
Important notice of disengagement:
As your tax professionals, we must formally document that:
- We have attempted to assist you in meeting your FBT obligations on [dates]
- Without your completed questionnaire, we cannot lodge an FBT return on your behalf
- As of [date], we will record that you have elected not to engage our services for FBT compliance
- Our firm cannot accept responsibility for any penalties or audit consequences arising from unmet FBT obligations
It's not too late to protect your business: [Complete Your FBT Questionnaire Now]
Please contact us urgently if you wish to discuss this matter.
Regards,
[Your Name]For Businesses Without Previous FBT Returns:
Subject: Protect your business: Final FBT compliance reminder
Hi [First Name],
Even businesses that haven't previously lodged FBT returns may still have obligations to assess and document their position each year.
What you need to know:
Without a completed assessment, your business may be exposed to:
- Questions during future tax or compliance reviews
- Potential challenges to expense deductions
- The burden of proving your position retrospectively
Our quick online questionnaire provides documentation that helps protect your business position:
[Complete Your 5-Minute FBT Check]
If we don't hear from you by [date], we'll record that you've elected to handle your FBT compliance independently this year.
Need assistance? We're here to help.
Regards,
[Your Name]Measuring Your FBT Process Improvement
A robust FBT workflow provides valuable insights into your firm’s processes:
- Response Analytics: Track client response rates and time-to-completion
- Efficiency Metrics: Measure total admin time saved per client
- Risk Dashboard: Visualise compliance gaps across your client base
- Year-on-Year Comparison: Track improvement in process efficiency
These metrics help refine your process each year while demonstrating clear value to partners and clients.
Client Resources: FBT FAQ
Providing this simple FAQ to clients helps address common questions and reduces follow-up inquiries:
Simple FBT FAQ for Clients
What exactly is Fringe Benefits Tax (FBT)?
FBT is a tax paid by employers on certain benefits they provide to employees or their associates outside of regular salary and wages.
Why do I need to worry about FBT if I’ve never lodged a return before?
The ATO requires all businesses to assess their FBT position annually. Even if you ultimately have no liability, you need documentation showing you’ve properly evaluated your situation.
What happens if I ignore FBT obligations?
The ATO can impose penalties, disallow related expense deductions, and conduct time-consuming audits of your business.
What are the most common fringe benefits that trigger FBT?
- Company cars available for private use
- Certain entertainment expenses
- Employee loans with reduced or no interest
- Housing or accommodation benefits
- Private health insurance
How does the smart questionnaire help me?
Our smart form walks you through simple questions to identify potential fringe benefits, guides you on what documentation to provide, and helps establish a clear record of your position—protecting both you and your business.
Take Action Now
With the ATO’s increasing focus on FBT compliance, implementing a streamlined process isn’t just about efficiency—it’s about protecting your firm and clients from costly compliance failures.
By following this 5-step framework, you’ll transform what was once a dreaded annual scramble into a smooth, predictable process that delivers value to your clients while minimising risk.
Is your firm ready for the next FBT season? Get in touch to learn more about streamlining your workflow.