FBT 2026: Chris Simmons on the Key Risks Businesses Need to Address
As the 2026 FBT season gets underway, MJC Partners CEO Chris Simmons shares his insights on the compliance risks, planning opportunities and common mistakes businesses should be focused on now.
With the ATO continuing to focus on FBT through data matching, review activity and inconsistencies in reporting, businesses that fail to properly assess employee benefits may be exposing themselves to unnecessary compliance risk.
According to Chris Simmons, FBT is one of those areas where the issue is often not just whether tax is payable, but whether the position has been properly reviewed, documented and addressed.
- Motor vehicles remain one of the biggest risk areas
Chris says motor vehicles continue to be one of the clearest and most common FBT risk areas for businesses.
Where a car fringe benefit may arise, businesses should make sure they have:
- considered the correct valuation method
- maintained a valid logbook where required
- kept the records needed to support their position
He warns that where a business is claiming motor vehicle expenses, or holding vehicles in a company or trust structure, but has not reviewed its FBT position, that inconsistency can attract unwanted ATO attention.
“Even small errors in vehicle records can attract ATO attention. Consistency and documentation are crucial.”
Chris also notes that novated leases, motor vehicle allowances and salary packaging arrangements should be reviewed regularly to ensure they remain correctly structured.
- Entertainment still catches businesses out
Entertainment remains one of the most misunderstood areas of FBT.
Chris says businesses often underestimate the FBT implications of:
- staff lunches
- Christmas parties
- client entertainment
- other hospitality-related expenses
While the 50/50 split method may be available in some cases for meal entertainment, accurate records are still essential.
He also cautions against assuming that all low-cost benefits are exempt.
“Just because an expense feels minor or informal does not mean it falls outside the FBT rules.”
- Gifts and vouchers are easy to overlook
Gift cards, vouchers and other non-cash benefits are another area where businesses can unintentionally create exposure.
Chris says the problem is often not the benefit itself, but the fact it has not been:
- identified
- valued correctly
- documented properly
That can create issues later if the ATO reviews the business’s position.
- Good record keeping remains critical
If there is one consistent theme, Chris says, it is documentation.
For each benefit provided, businesses should be able to clearly show:
- who received it
- when it was provided
- what it was
- how it was valued
- what records support the treatment adopted
“FBT is one of those areas where the records are often just as important as the underlying transaction.”
Even where a benefit appears minor, the ATO may still request supporting evidence during a compliance review.
- FBT is not just about whether tax is payable
One of Chris’s strongest messages is that FBT should not only be reviewed where a business expects tax to be payable.
In many cases, the real value lies in making sure the position has been properly considered, any exemptions or employee contribution strategies have been assessed, and the correct lodgement position has been adopted.
“FBT compliance is not just about avoiding penalties. It is also about structuring employee benefits in a way that adds value to your team while reducing unnecessary tax costs.”
A proactive review before lodgement can help identify benefits provided during the year, determine whether exemptions or concessions may apply, and ensure salary packaging arrangements remain current and correctly structured.
Action for clients
Chris encourages clients to keep an eye out for their FBT questionnaire and return it promptly so all relevant benefits can be captured and assessed correctly for the 2026 FBT year.
Even where little or no FBT is ultimately payable, having the position properly reviewed, documented and addressed can be an important step in reducing risk and supporting compliance.
If you are unsure whether a particular benefit gives rise to FBT, now is the time to seek advice rather than wait until lodgement time.
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