Small business accountants talk FBT
The most recent Federal budget contained changes to the countries Fringe Benefits tax system as they apply to motor vehicles.
In short, the changes were designed to reduce the tax break that was benefiting employees travelling high kilometres, that is, in excess of 40,000km per annum, whilst inadvertently penalising those travelling fewer kilometres each year. The changes are not only designed for income tax consequences, but also for environmental reasons. The Governments reasoning is that the former system was encouraging small business and individuals to rack up higher than usual kilometre usage on their vehicles just to take advantage of the sliding FBT rates. By progressing towards a flat rate of FBT for all vehicles, regardless of kilometres travelled, those who are unable to travel such high kilometres will still be able to benefit from the tax advantages of claiming their car expenses in this manner. Those who do have the capacity, may now be less tempted to do those ‘round the block' trips on 31 March each year just to rack up a few extra kilometres.
This is a rather complex area of our countries income tax laws, and any decisions taken, based on the Governments proposed policy, should only be done after seeking out the advice of a trusted, qualified professional, small business accountant.￼