Example
An employer provides their employees with a sedan, dual cab and a single cab utility vehicle. The employer restricts the private use of those vehicles to home and work only and for other work trips.
The employees park the vehicles overnight at their private residence. The following are the outcomes of this arrangement from an FBT point of view.
|
Sedan |
Dual Cab |
Single Cab |
Cost of the vehicle |
$80,000 |
$80,000 |
$80,000 |
Private use? |
Yes - home to work only |
Yes - home to work only |
Yes - home to work only |
Payload capacity |
Less than one tonne |
Less than one tonne |
More than one tonne |
Type of benefit |
Car Fringe Benefit |
Car Fringe Benefit |
Residual Fringe Benefit |
Is it exempt? |
No – the limited private use exemption does not apply to cars that are designed to carry passengers. |
Limited private use exemption would only apply if the vehicle is not designed to carry passengers (which requires a calculation using the specifications of the vehicle.) |
Yes – limited private use exemption would apply. |
FBT Payable |
Approx. $15,600 per year if no logbook is kept |
If vehicle is designed to carry passengers - Approx. $15,600 per year if no logbook is kept. |
Nil. |
|
|
If vehicle is not designed to carry passengers - Nil. |
|
It may seem like semantics, but the type of vehicle will determine what options are available in valuing the fringe benefit provided and whether any exemption from FBT is available. As mentioned above, the ATO is getting information in respect of the type of vehicle from lease providers and motor vehicle registries, so their data matching capabilities increase the risk of reviews in the future. Another issue the ATO will probably challenge is record keeping and whether a business has undertaken any steps to ensure the employees have used the vehicle in line with the policy (e.g., odometer records). |