Fringe Benefits Tax (FBT) is not payable to the ATO on the private usage of zero or low emissions vehicles.
Ok great, but what does that mean.
Normally any personal usage of a company or work car will be subject to extra (FBT) tax to make sure tax is being paid on all benefits an employee receives that aren’t salary/wages. This stops people asking the boss to provide a car (or other benefits) to make their wages look lower and to minimise income tax payable. The business pays the tax and it is often reported separately on the employees group certificate/payment summary/STP finalisation.
Personal usage would generally be travel from home to workplace, after hours and weekend travel for personal purposes. A logbook should be maintained to prove business usage of each and every car owned by a business.
An electric vehicle may be exempt from the extra becoming payable. Some of the other rules still apply.
What?
– A battery electric vehicle
– hydrogen fuel cell electric vehicle
– plug-in hybrid electric vehicle (only until April 2025)
To be eligible for the exemption, the value of the electric car must be below the LCT threshold for fuel efficient vehicles at the time it is first sold in a retail sale, and in any subsequent sale. ($89,332 in FY23/24)
If you purchase an electric car second hand, you need to determine if it was subject to LCT at any time in the past.
A car designed to carry a load of less than 1 tonne and fewer than 9 passengers (including the driver).
Not
Motorcycles and scooters are not cars for FBT purposes and do not qualify for the exemption, even if they are electric.
Home charging stations are also not exempt.
When?
from 1st July 2022. To be reviewed in 2027.
The electric car must be used for the first time on or after 1 July 2022 – even if it is held before this date.
Who?
The car is used by a current employee or their associates (such as family members)
How?
Although the private use of an eligible electric car is exempt from FBT, you include the value of the benefit when working out whether an employee has a reportable fringe benefits amount (RFBA). You will need to work out the notional taxable value of the benefits associated with the private use of the exempt electric car.
An employee has an RFBA if the total taxable value of certain fringe benefits provided to them (or their associate) is more than $2,000 in an FBT year. The RFBA must be reported through Single Touch Payroll or on the employee’s payment summary.
More: https://www.ato.gov.au/Business/Small-business-newsroom/Employers/Sparks-are-flying-this-coming-FBT-year/
