Fringe Benefits Tax (FBT) and Utility Motor Vehicles

A utility vehicle may still be a reportable fringe benefit for an employee according to a recent private binding ruling.

A utility vehicle is a motor vehicle designed to carry a load of more than one tonne.

Even though there are some exemptions for these vehicles, some fringe benefits may be counted as a residual benefit.

For the purposes of FBT, the following trips are exempt for a utility vehicle:

• travel undertaken in the course of producing assessable income

• travel of the employee between home and work

• Private trips that are only minor, infrequent and irregular.

We recommend that you keep a record of all the trips that aren’t in these categories, i.e. regular private usage.

With the FBT season upon us, please remember the requirements for maintaining a log book include;

•Period start and end date including the odometer readings at these times

•The total number of kilometers the car travelled during the logbook period

•The number of kilometers travelled for work during the logbook period

•The work-use percentage for the period.

A logbook must cover at least 12 continuous weeks for it to be valid and a valid log book can be used for up to five years provided business usage is consistent.

The individual entries in the logbook for each business trip must be made at the end of the journey.

The entries must show the:

•Date of the journey

•Odometer readings at the start and end of the journey

•Kilometers travelled on the journey

•Reason for the journey.

For further information please contact your RCB Advisors team member.

Sources:

Australia Taxation Office (https://www.ato.gov.au/rba/content/?ffi=/static/rba/content/1013086893179.htm)