It's no secret.
Australia continues it's love affair with ute's or SUV's - Toyota Hilux and Ford Ranger are still the country's best selling motor vehicles
The Tax Effect
So you had a ute before they become cool....we get it. But you have to admit, you also knew that there were some good tax perks to buying a ute that really helped you out too, right?
Well that may be changing. On 11 July 2018, the ATO released PCG 2018/3 Exempt car benefits and exempt residual benefits: compliance approach to determining private use of vehicles. We have tried to make it easier for you by summarising the key policies that your business will need to have in place for employees that use your utes and panel vans, to ensure they remain exempt from FBT.
What do you need to know:
- Minimise purchase of company vehicles that are more than the luxury car tax threshold, these are not eligible for the FBT exemption
- These vehicles cannot form part of a salary package of an employee
- Adopt a Company Vehicle Use Policy a per the attached template and distribute to all employees
What you need to do:
- Review the current register of company vehicles to see if you have any utes or panel vans.
- Review the attached Company Vehicle Use Policy, and upload it on a Company Letterhead.
- If the vehicles form part of a salary package, please contact our office for action required.
- If the vehicles are not part of a salary package, get the employee who have access to this vehicle to sign the Company Vehicle Use Policy. Once done, provide our office with a signed copy for our records.
- In the future, ensure that where new vans and SUV's are purchased:
- It does not exceed the luxury car tax threshold;
- It is not included as part of a salary package of an employee
- The employee signs the Company Vehicle Use Policy agreement