Private use of motor vehicles can be an FBT nightmare for administration and record-keeping.
It is a frequent source of queries received by TaxEd.
The FBT concession for ‘minor, infrequent and irregular’ private use of eligible (workhorse) vehicles can be especially problematical. This concession, together with the more specific private use concession for ‘work related travel’, is set out in in s. 8(2) and 47(6) of the FBT Act – ‘the car-related exemptions’. It will be recalled that ‘work-related travel’ is defined in s. 136(1) as including travel by an employee between his or her place of residence and place of employment or other place at which employment duties are performed.
The ATO has just released a draft Practical Compliance Guideline, PCG 2017/D14. It offers some (limited) relief to employers confronted with the need to identify and document the extent of private use of workhorse vehicles.
The draft guideline explains when the ATO will not apply compliance resources to determine if the private use of the vehicle was limited for the purposes of the car-related exemptions.
The ATO is seeking public comment on the draft guideline by 9 February 2018.
TaxEd will be will be discussing private use of motor vehicles, along with a multitude of other topical FBT issues affecting the Government and NFP sectors, in the TaxEd FBT Roadshow 2018.
This article provides a general summary of the subject covered as at the date it is published. It cannot be relied upon in relation to any specific instance. TaxEd Pty Ltd and any person connected with its production disclaim any liability in connection with any use. It is not intended to be, nor should it be relied upon as, a substitute for professional advice.