FBT on private use of utility vehicles

A motor vehicle designed to carry a load of more than one tonne may still be a reportable fringe benefit for an employee. The ATO has confirmed in a recent Private Binding Ruling any consistent use of these vehicles is a residual fringe benefit.

With the fringe benefits year fast approaching, it is important that your claims are accurate. Even though there are exemptions for vehicles such as utilities, some fringe benefits may be counted as a residual benefit.

For the purposes of FBT, the following trips are exempt for utilities:

  • travel undertaken in the course of producing assessable income
  • travel of the employee between home and work, and
  • for private travel, trips that are minor, infrequent and irregular.

We recommend that you keep a record of all the trips that aren’t in these categories. For example, if you make regular private trips. An example of this may be a regular family-related trip, or regular weekend trips.

Our firm would be pleased to chat with you if you require any further clarification on this matter. Please do not hesitate to give us a call.

Norman Ruan
T: 02 9984 7774
E: normanr@northadvisory.com.au

Martin van der Saag
T: 02 9984 7774
E: martinv@northadvisory.com.au

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