FBT errors – we are only human after all, right?

By Conor Gates

Some of the most common FBT errors in FBT returns arise where the underlying information is prepared in an Excel spreadsheet.  We frequently come across systemic errors in the underlying formulas with preparers relying on what has been done previously.  Often the errors are repeated quarter on quarter as the FBT spreadsheet is rolled over and updated with the new information without any critical consideration of how the spreadsheet operates.  Common errors in Excel spreadsheets include:

• Totals or subtotals not capturing all of the relevant data to be summed;
• Incorrect formulas being used to determine the taxable value of benefits - this is particularly prevalent in the calculation of motor vehicle benefits where the calculation of the days available is not updated for the relevant days in the quarter for instance;
• Formulas which are copied and pasted referring to incorrect cells or cells which are not locked as ‘absolute’ cells in a formula;
• Where an adjustment for an exceptional item in a quarter is carried forward in subsequent periods; and
• We recommend that preparers undertake a sense-check of the FBT calculation to identify anything that is unexpected.  We also recommend working through the spreadsheet to follow the calculation of benefits from the input data through to the final calculation of FBT due.

And finally, just because the spreadsheet has always been done in a particular way does not necessarily mean that the spreadsheet is correct!

For further information, please contact your Deloitte tax advisor.

Tax Alert April 2016 Contents:

• Outsourcing payroll compliance overseas? Beware the risks
• GST on “remote” services
• The rise of holiday pay woes
• A step in the right direction – relaxation of the bank account requirements for IRD number / GST applications
• FBT errors – we are only human after all, right?
• Use of money interest rates to reduce