FBT Instalments (labels F1, F2, F3)

Label F1—ATO Instalment Amount

The amount at Label F1 on the activity statement is the FBT instalment amount for the current quarter. Instalments are based on the notional tax amount, which is the equivalent of the tax that would have been payable on the business or investment income (excluding any capital gains) in the most recent assessment for the most recent income year.

Generally the notional tax amount is the same as the previous year's FBT liability. An application can be made to vary the notional tax amount in certain circumstances (refer to LabelF2—EstimatedFBTfortheYear and LabelF3—VariedAmountfortheQuarter, below).

Label F2—Estimated FBT for the Year

Complete this field only if the business chooses to vary the FBT instalment amount for quarter, as entered at Label F1.

If the business estimates that its total FBT payable for the FBT year ended 31 March will be different from the notional tax amount, varied instalment amounts may be paid based on the estimated liability.

In estimating the total FBT payable, you may use the Gross Up formula applicable to the year end of 31 March.

The business will still be required to pay by instalments if it estimates that this year's FBT liability will be less than $3000, unless it expects this year's liability to be nil.

However, remember that there are penalties if the estimate of tax payable is less than 85% of the tax ultimately assessed for the year, and instalments have been paid on the basis of that estimate, and you may be liable to the General Interest Charge (GIC).

Label F3—Varied Amount for the Quarter

This field is calculated using the following formula:

Estimated total FBT payable is the amount recorded at Label F2.

Relevant fractions are:

• .25 for the quarter ended 30 June

• .50 for the quarter ended 30 September

• .75 for the quarter ended 31 December

• 1.00 for the quarter ended 31 March

Previous instalment liabilities are the sum of the amounts recorded at Label 6A on the previous activity statements for the FBT year.

Any previous credits claimed are the sum of the amounts recorded at Label 6B on the previous activity statements for the FBT year.

Label F3 may be calculated using the Credit from FBT instalment variation worksheet.

Label F4—Reason for FBT Variation

Complete this field only if the FBT instalment amount has been varied.

The following list of reasons for the variation of the FBT instalment amount are provided:

• 01 Benefits ceased/reduced and salary increased

• 02 Benefits ceased/reduced and no compensation to employees

• 03 Fewer employees

• 04 Increase in employee contribution

• 05 Section 65J rebate now claimed

• 06 Liquidation, receiver/manager appointed

• 07 None of the above