ATO Confirm Changes To FBT Exemption For Utes & Vans

The Field Group - Accountants & Business Advisors > Blog > ATO Confirm Changes To FBT Exemption For Utes & Vans

The Australian Tax Office (ATO) has made a change to the FBT guidelines, set to take affect for the 2019 Fringe Benefits Tax (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 previous “minor, infrequent and irregular use” test that has been in place.

What the changes mean for you

Essentially commercial vehicles (think ute or van) will now attract fringe benefit tax, unless:

  • Your employee only uses the vehicle to travel between home and work – with no diversion that adds more than 2km to the trip
  • Multiple journeys for private use account for no more than 750km for each FBT year (15km per week on average)
  • No single return journey for a private purpose exceeded 200km

If you haven’t been calculating FBT for work utes up until now, it’s time to start! At the very least you will require an employee declaration to confirm any private use didn’t exceed these thresholds.

This document contains general advice only and is prepared without taking into account your particular objectives, financial circumstances and needs. The information provided is not a substitute for legal, tax and financial product advice. Before making any decision based on this information, you should speak to a licensed financial advisor who should assess its relevance to your individual circumstances.  While The Field Group believes the information is accurate, no warranty is given as to its accuracy and persons who rely on this information do so at their own risk. The information provided in this bulletin is not considered financial product advice for the purposes of the corporations Act 2001.

About the author

The Field Group is composed of experts in the fields of Xero accounting, personal tax, self-managed superannuation, audit services, business services, bookkeeping, bench marking, business structuring and ATO Compliance. Based in Melbourne, The Field Group are also able to work with clients all over Australia and are the market leader for accounting services in the Ringwood, Croydon, Chirnside Park, Lilydale and general Melbourne eastern suburb region.

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