The current Fringe Benefits Tax year ends on 31 March 2020.

With less than a month to go, now is the time to review the fringe benefits you are providing to your employees.

Here’s what you’ll need:

  • FBT declarations
  • Logbook records for car fringe benefits
  • Any other FBT records for fringe benefits provided to employees
  • Relevant information for 2020 FBT returns.


To be a car, or not to be a car? That is the question.

Despite popular opinion, utes are not automatically exempt from FBT and the ATO has been paying particular attention to this assumption recently. 

A vehicle can be exempt from the car fringe benefit rules if it is not in fact considered a car. But what makes a car, a car? I’m glad you asked:

For a vehicle to not be considered a car:

  • The vehicle must have a carrying capacity of at least 1 tonne*; and/or
  • The vehicle must be designed to carry more than 8 passengers (these passengers must have seats, throwing 8 mates in the tray of the ute sadly does not count).

However, even if a vehicle falls into the above category of a “non-car” the private use of the vehicle must also be limited to:

  • Travel between home and work
  • Other private use which is minor, infrequent and irregular.

 

 

 

 

What constitutes minor, infrequent or irregular?
New guidelines for eligible vehicles were released by the ATO on 1 April 2018 and states the ATO’s view on what constitutes private use which is minor, infrequent and irregular in relation to eligible vehicles.

The private use of an eligible vehicle is considered minor, infrequent and irregular where:

  • an employee uses the vehicle to travel between their home and their place of work and any diversion (e.g. to pick up children from school) and adds no more than two kilometres to the ordinary length of that trip, and
  • for private journeys (other than travel between home and place of work), the employee does not use the vehicle to travel:
  • more than 1,000 kilometres per year in total; and
  • a return journey that exceeds 200 kilometres.

The ATO advises that to be able to rely on these guidelines you must, amongst other requirements, have a workplace policy in place which limits the private use of the eligible vehicle and you must obtain assurance from your employee that the private use of this vehicle was in fact limited (his road trip across the Nullarbor probably doesn’t count).

The rules can be confusing or complex so please feel free to call us if you need any clarification before 31 March 2020.

*How do we work out the carrying capacity? It is calculated on the gross vehicle weight less the kerb weight of the vehicle. Need help doing the math? Feel free to give us a call!