Annual FBT returns (IR 422) – Small business option

Annual FBT returns (IR422) can be filed instead of quarterly FBT returns, if you meet one of the following criteria, and you make an election before the due date:

• Gross tax and ESCT for the previous year is $500,000 or less; or
• You were not an employer in the previous year.

If you make an election, you must send it to Inland Revenue by the due date. If they do not receive it by the due date, then you will need to file quarterly returns for the year. Refer to the Income Tax Act 2007, RD 61 Small business option for more details.

Income year FBT returns (IR421) – Close company option

Income year FBT returns are different to annual FBT returns. It is based on a non-standard balance date. You can elect to use the Fringe benefit shareholder/employee tax income year tax return (IR421) if:

• your company has shareholder-employees only, and your annual gross tax and ESCT are less than $500,000, or
• you are a closely held company and you only provide motor vehicles for private use to shareholder-employees and that benefit is limited to 2 vehicles.

This return covers the accounting year of your company. You should file it by the due date for paying end-of-year income tax. Refer to the Income Tax Act 2007, RD 60 Small business option for more details.

Use FBT Software to file annual FBT returns

You should consider using FBT software to prepare returns, including annual FBT returns and income year FBT returns. It is the fastest, most efficient way of completing even small returns and is accurate and fully documents the attribution calculations. Contact us today to find out more.