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In this month’s newsletter the focus is on Fringe Benefits Tax (FBT) and the Trade and Tariff Wars with the US.
FBT AUDIT RISK
The ATO is concerned that some employers are not lodging FBT returns when required to.
If your business employs staff (even closely held staff such as family members), and is not registered for FBT, it’s essential to ensure that the position is reviewed to check whether the business could potentially have an FBT liability.
The FringeBenefits Tax (FBT) year ends on 31 March. We’ve outlined the hot spots for employers and employees for you to review and see how it impacts your business.
TRADE WARS AND TARIFFS
Tariffs increase the price of imported goods and reduce trade flows of that good or service.
In his first term, President Trump imposed a 25% global tariff on steel and a 10% tariff on aluminium (which Australia managed to reduce to zero with supply limits imposed instead). The impact was reportedly a 2.4% increase in the price of aluminium and 1.6% increase in the price of steel in the domestic US market. The cost of tariffs is not borne by overseas suppliers but indirectly through a reduction in trade and domestically through higher prices, particularly where those goods and services are common.
For the US however, the negative impact of tariffs will be felt less abruptly than many of its trading partners as trade only represents around 24% of US gross domestic product (GDP) – whereas trade accounts for 67% of Canda’s GDP.
Australia is impacted indirectly by demand. China is Australia’s largest two-way trading partner, accounting for 26% of our goods and services trade in 2023. If Chinese demand slows as a result of a trade war, Australia’s economy will slow.
Read more here.
If you’d like to discuss anything enclosed in this months newsletter, contact us today.
Kerrily and Louise – Directors
