Motor vehicles often comprises a significant percentage of an organisations FBT liability, hence the desire to reduce the FBT liability. The FBT technical rules in relation to Motor vehicles are complex, and often practically difficult, when seeking to reduce the taxable value, whether by:
- One third reduction
- Employee contribution
- Claiming days unavailable
- Logbook records; or
- Claiming exemption
When reducing the taxable value (for any benefit category) the reduction must be fully supported and documented.
More recently the ATO have released concessional Practical Compliance Guidelines (PCG) in relation to Logbook and claiming exemption for Tool of Trade and Work related vehicles. These PCG’s themselves contain a level of complexity and strict requirements to avail the concession and associated reductions.
Motor vehicles remain a key focus area by the ATO through scrutiny of claiming Motor Vehicle expenses, double dipping on Novated Lease car expenses, GST & Depreciation on luxury cars, Logbooks, claiming Exemption, correct Valuation choice or correctly reporting Employee Contributions for FBT, GST and Income Tax purposes.