Fringe Benefits Tax Myth Busted

Hello Chasers,

With the race to attract talented employees in a labour shortage market, some employers are using fringe benefits as a means, but are doing so without fully being aware of the rules.

The ATO has been increasing its activity and communication concerning fringe benefits tax (FBT) amongst tax agents with several employers pushing the limits with the personal use exemption.

Some employers are offering fringe benefits for the first time as they think about how to attract different employees or how to retain good employees and they may not fully understand the true cost and administrative requirements of fringe benefits tax.

One of the most prevalent myths the ATO is experiencing an increase in misunderstanding is that dual-cab Utes are automatically exempt from FBT if they are provided to employees for work purposes and used for private purposes on weekends.

The exemption for private use of work vehicles only applies in very limited circumstances. If employees use work Utes for personal activities like camping, fishing, towing a horse float or bike riding, it will not be considered exempt private use and will attract FBT.

The tax rate for fringe benefits tax is 47% and can impact the cashflow of a business quite dramatically if there are a fleet of vehicles provided to employees.

The ATO’s increased focus on FBT compliance highlights the importance of employers and tax professionals staying informed about the latest regulations and guidelines. By understanding the rules and avoiding common myths, employers can minimise their FBT obligations and ensure they are adhering to their tax responsibilities.

If you are considering purchasing or providing your team with a motor vehicle, make sure you understand the rules and records required to be kept to avoid a nasty unplanned tax bill.

Have a great day!

Read more of our daily blogs for valuable insights and stay up-to-date with the latest industry news – click here to access the full article on our blog page.

Share This

Related Posts

4 Min Read

Redraw Vs Offset – What’s the Difference?

Hello Chasers, Buying a house is a huge achievement, but let’s be honest, managing that mortgage can feel like a marathon, especially if it is going to take 30 years to pay it off! The good…
Read Full Article
4 Min Read

Flythrough – Create Stunning Home Videos with Your Phone!

Hello Chasers, Now this tool is really cool! Selling your home?  Want to showcase its awesomeness in a way that blows away potential buyers?  Forget expensive drone footage or fancy cameras!  There’s a new app in…
Read Full Article