The Tax Office is targeting common areas of confusion related to fringe benefits tax, particularly concerning the personal use exemption.

Speaking in a recent podcast, ATO Deputy Commissioner Ms. Rosenzweig explained that the tight labour market is prompting many employers to start offering fringe benefits to employees who hadn’t previously received them.

“One of the myths we’ve been looking to bust is around utes, dual cab utes in particular, because there’s been this idea that if you provide a ute to your employees for work and they take it home over the weekend, then that doesn’t attract FBT,” she said.

 

“However, I’m here to tell you that there is no magic in a ute and the exemption for private use of a work vehicle for FBT is only where that private use is really limited. So if your employees are able to take the work car home on the weekend and they go camping or take their bikes to go on biking trails, then that is not limited to personal use and will start to attract FBT.”

Employers whose employees use work vehicles for private purposes should discuss these matters with their accountant at MKG Partners regarding what qualifies as exempt car benefits and when it might begin to fall into FBT territory.

Additionally, with the Christmas period approaching, employers should consider how FBT may apply to end-of-year work celebrations.

The FBT responsibilities for our company and trust clients are continually evolving, especially when our clients hire new employees and offer remuneration packages that are not solely based on cash. It’s crucial to remember that FBT can also apply to company directors and can impact the proportion of expenses claimed by companies and family trusts operating a business.

Employers whose employees use work vehicles for private purposes should discuss these matters with their accountant at MKG Partners regarding what qualifies as exempt car benefits and when it might begin to fall into FBT territory.

Additionally, with the Christmas period approaching, employers should consider how FBT may apply to end-of-year work celebrations.

The FBT responsibilities of our company and trust clients is a moving beast that can change everytime our clients employ someone new and offer a remuneration package that is not based solely on cash. It is always important to remember that FBT can also apply to directors of companies and associates and will influence what proportion of expenses are claimed in companies and family trusts operating a business.

MKG Partners will consistently reach out to clients in March and April to ensure that your FBT compliance process is completed as required. However, if you have any questions about different approaches to onboarding new employees into your business, please contact your MKG Partners accountant to ensure you have the right processes in place.

If you found this information on Fringe Benefits Tax (FBT) and related obligations valuable, you may also be interested in our previous blogs: A Quick Guide to Fringe Benefits Tax and Logbook Requirements for Fringe Benefits Tax. These articles provide further insights into FBT and the importance of maintaining a logbook for compliance. Feel free to explore them for a comprehensive understanding of FBT obligations and strategies to navigate the complexities of taxation.