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If there was any doubt that Motor Vehicles is the biggest issue, the ATO have confirmed their concerns and provide examples where based on ATO data and risk models, they will select an employer for a FBT car review to check if the company is meeting its FBT obligations.

Motor vehicles

We see a significant level of non-compliance in situations where an employer provides a motor vehicle to an employee (or their associate) for their private travel or makes it available to use privately.

Situations that concern us include when employers:

  • treat cars as 100% business use, even though they are used or available for private purposes
  • don’t have a valid log book, or the log book is not a representative sample of actual travel
  • treat all eligible commercial vehicles as FBT exempt, without considering if the private use of the vehicle was limited.

ATO Example One: identifying private use

Eve is the owner and sole director of a company, Eve’s Consultancy Business Pty Ltd (ECB). Eve arranges for ECB to purchase a car, which she uses to visit clients and for other work-related travel.

Eve considers the car to be a business car because it is owned by the company and has a sign on the side with the business name. Therefore, ECB does not keep a log book and does not lodge an FBT return.

Based on our data and risk models, we select ECB for an FBT car review to check if the company is meeting its FBT obligations.

During the review, Eve explains that the car is garaged at her home and she uses it for her daily commute to the office.

We advise Eve that:

  • home to work travel is private use
  • when a car is garaged at an employee’s home (as a director of ECB, Eve is considered an employee for FBT purposes), the car is considered to be available for their private use
  • in both instances a car fringe benefit has been provided and FBT applies.

We provide Eve with information about how to calculate FBT using the statutory formula method (she can’t use the operating cost method because there is no log book). She agrees to lodge an FBT return for ECB.

ATO Example Two: limited private use of eligible vehicles

BTE is an engineering business. It has a fleet of dual cab utes (with a carrying capacity of less than 1 tonne) and sedans, which its employees use to attend business sites and visit clients.

BTE considers that FBT doesn’t apply to the vehicles because the utes are eligible commercial vehicles and the sedans are only used for business purposes. Therefore, BTE does not lodge an FBT return.

Based on our data and risk models, we select BTE for an FBT car review to check if the business is meeting its FBT obligations.

The review identifies that the sedans remain at the office and the utes are taken home by employees and used for private purposes (such as weekend sport and camping trips).

We advise BTE that the private use of the utes must be limited to be an exempt benefit (see PCG 2018/3 Exempt car benefits and exempt residual benefits: compliance approach to determining private use of vehicles). The utes were used for extensive private purposes therefore these conditions have not been met. In this situation a car fringe benefit has been provided and FBT applies.

We provide BTE with information about how to calculate FBT. The business lodges an FBT return.


Do you provide car parking to your employees?

The definition of a Commercial Car Parking Station has broadened…we are all aware of the “big name” Commercial Parking Station operators, but from 1 April 2022 – the definition has been broadened significantly.

Is the parking provided within 1 kilometre of a:

  1. Shopping Centre

  2. Hospital

  3. University

  4. Hotel

  5. Airport

  6. Council

  7. Pay and Display

Understand if your locations are caught by the new rules. We can help you assess exposure & cost.




TAXPO 2023

Was great to be one of the organisers of TAXPO 2023 and embrace our Top Tax Gun Theme. I really enjoyed all of the speakers and meeting new people. My session focussed on ATO FBT audits and what Small Businesses need to do to avoid or manage an FBT audit.

Next stop Melbourne at the Grand Hyatt Hotel on Thursday 19 October 2023 – more information to be shared soon.

Check out the highlights video I posted on LinkedIn (you may need to copy and paste the link to your browser):   https://tinyurl.com/y66jp4hf

Here is the TOP TAX GUN agenda:


If you work for or own an Accounting or Professional Services Firms located in a Remote Area, then there is an opportunity to access the Remote Area concessions in the FBT Law.

However, one of the criteria is that it must be Customary in the Industry to provide the remote area benefits.

I’m interested in hearing from any Accounting Firms or Professional Services Firms that are located in a remote area. This might be an opportunity for your firms, but also for your clients.

Please feel free to email me:  paul.mather@fbtsolutions.com.au or call me on 02 8216 0750 or 0403 050 358.