ATO revving up its car FBT crosschecking efforts

The fringe benefits tax (FBT) year has just ended and the FBT return lodgement deadline is now on the horizon. The ATO has taken the opportunity to remind employers that it is actively using data matching to identify potential FBT obligations associated with motor vehicles.

Businesses that have bought a vehicle in the last two years are likely to be affected by this data matching program, with the ATO emphasising that its program targets compliance in three key areas — FBT, the luxury car tax, and fuel schemes (such as fuel tax credits) which are administered by it.

The ATO said that common issues found in some of the more high-risk cases involving cars and FBT obligations include employers failing to correctly identify private use, and failing to keep supporting documentation, including log books and odometer records. It has flagged the fact that it is using information obtained from various motor vehicle registration bodies in each state and territory to identify employers who have bought a business registered vehicle but have not, for example, registered for FBT.

The ATO’s vehicle data matching efforts also identifies all motor vehicles sold, transferred or newly registered in the 2011-12 and 2012-13 financial years where the transfer and/or market value is $10,000 or greater. Data from income tax returns, at the category for motor vehicle expenses, will also be matched.

The ATO said that employers who make a car available to employees for “private use” will most likely have an FBT liability. Cars are made available

to an employee/associate when the car is not at the employer’s premises and the employee is allowed to use it for private purposes.

Business owners should be aware that:

  • if a car is garaged at an employee’s home, it is taken to be “available for private use” (regardless of whether they have permission to use if for private purposes), and
  • as a general rule, travel to and from work constitutes private use of a vehicle.

There are only limited circumstances where an employee’s private use of a vehicle is exempt. For example, no FBT is payable where all of the following conditions are met:

  • a work-related vehicle (being either a taxi, panel van or certain utility vehicles) is provided
  • the car is used for work-related travel and for travel between home and work only
  • there is minimal private usage of the vehicle (the ATO cites an example of occasional use of the vehicle to remove domestic rubbish).
  • Consult this office if you feel at all concerned about your obligations related to FBT and motor vehicles.
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