Vehicle’s ‘private use’ for FBT gets some wriggle room — up to a point
The ATO has made a change to the FBT rules, set to take affect for the 2019 FBT year and beyond, that will give businesses that supply employees with motor vehicles (that are not cars) a prescriptive method to apply to get an exemption to FBT. It is a change from the objective test that has been in place.
Generally, a fringe benefit arises where an employer makes a vehicle they hold available for the private use of an employee. Under the car-related exemptions of the FBT rules, a fringe benefit is an exempt benefit where the private use of vehicles is limited to work-related travel and other private use that is “minor, infrequent and irregular”.
The ATO’s practical compliance guideline on the matter says there has been demonstrated inconsistency in the application of exemptions, leading to additional compliance costs, especially where private travel is relatively low.
“To reduce these compliance costs and provide certainty, this draft guideline explains when the Commissioner will not apply compliance resources to determine if private use of the vehicle was limited for the purposes of the car-related exemptions,” the PCG says. […]