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ATO Alert - Covid Affecting Car Fringe Benefits for Emplolyers

Posted on 21 October 2020
ATO Alert - Covid Affecting Car Fringe Benefits for Emplolyers
ATO Alert - COVID Affecting Car Fringe Benefits

The ATO is warning employers to take care to avoid unnecessary FBT for car fringe benefits provided to employees.

As a result of the COVID lockdown earlier this year, many employees have been working from home at a far greater rate.  If these employees have had the use of a car provided by their employer, the employer will need to check how they are calculating their fringe benefits, to avoid unnecessary FBT.

With working from home becoming much more prevalent in 2020, many cars provided by employers are idling away in their employees' garages. 

When a car is not being driven by the employee at all, or is only being driven for the purposes of maintenance, the ATO will accept that the employer is not holding the car for the purposes of providing a fringe benefit.  If the employer elects to use the operating cost method, and keeps sufficient records, they may not have an FBT liability for that car - or their liability may be reduced.

To ensure that the FBT liability is kept to a minimum, it is recommended that employees keep a log book to record the reduced use of the vehicle.  This will help the employer to correctly record business vs private use and will serve as evidence of reduced use of the car due to changes in work practices, resulting from the pandemic.

Talk to our tax team for further details on how COVID-19 might impact on your business's FBT liability.

 

Every effort has been made to offer the most current, correct and clearly expressed information possible within this site. Nonetheless, inadvertent errors can occur and applicable laws, rules and regulations may change. The information contained in this site is general and is not intended to serve as advice. No warranty is given in relation to the accuracy or reliability of any information. Users should not act or fail to act on the basis of information contained herein. Users are encouraged to contact Rhodes Docherty & Co professional advisers for advice concerning specific matters before making any decision. Liability limited by a scheme approved under the Professional Standards Legislation.

Rhodes Docherty Financial Advisors Pty Ltd ABN 43 122 391 315 is an Authorised Representative of RDC Advisors Pty Ltd, Australian Financial Services Licensee No. 396268 (Ph. 02 9988 4033). Any advice contained in this website is of a general nature only and does not take into account the objectives, financial situation or needs of any particular person. You should seek advice from Rhodes Docherty Financial Advisors who can consider if the general advice is right for you.

 

 

Tags: Fringe Benefits Tax Employers Business Car Work from home Coronavirus COVID-19 Rhodes Docherty
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