Private use of work vehicles clearly defined
LNA Master Landscapers Association has provided some useful information on new Australian Tax Office (ATO) issued guidelines for fringe benefits tax (FBT) on work vehicles. The association says changes may call for small to medium-sized business owners to reconsider the use of company cars or cars provided as perks.
Under ATO regulations, an employer can claim FBT exemption on complying work vehicles issued to employees — provided that private use of the vehicle is deemed "minor, infrequent or irregular". That loose definition was relatively open to interpretation, so the ATO has now provided clarity and set specific limits on private travel. From the 2019 FBT year onwards, employees are allowed up to 1000 km of private travel in company cars per year, provided that no single return journey exceeds 200 km.
As LNA points out, this is not a change to laws or rules, it is merely clarification on a particularly 'fuzzy' issue. It means that log books need to be completed and private use confined to that threshold or there may be penalties to pay.
FBT exemption only applies to vehicles that meet ATO-set parameters, so if you need further information on eligible vehicles or clarification on the new guidelines, be sure to consult your tax agent or accountant.
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