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FBT Q&A – ‘Workhorse’ vehicles and private use thresholds

Question

An employee has use of a utility designed to carry a load less than 1 tonne. The only private use of the utility is to and from home. No minor, infrequent or ad-hoc private use.

The employee’s home is 160km from the office. Is there a distance threshold for home to work travel that limits the ‘workhorse’ car exemption?

Answer

The FBT Legislation does not stipulate a maximum private kilometre distance between home and the place of work for the purposes of the exemptions in section 8 and 47 of the FBT Act (i.e. the ‘workhorse’ exemptions).

The only limitations on private use relate to the ‘minor, infrequent and irregular’ private travel OTHER than private travel between home and the place of work. ATO Practical Compliance Guideline PCG 2018/3 provides the following restrictions in its guideline in respect to this requirement as follows:

‘(f) your employee uses the vehicle to travel between their home and their place of work and any diversion adds no more than two kilometres to the ordinary length of that trip, and

(g) for journeys undertaken for a wholly private purpose (other than travel between home and place of work), the employee does not use the vehicle to travel

(i) more than 1,000 kilometres in total, and

(ii) a return journey that exceeds 200 kilometres.’

 

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