As 31 March looms, businesses across Australia are gearing up to tackle their fringe benefits tax (FBT) obligations. For many companies providing employees with motor vehicles, managing FBT can be particularly complex, especially when it comes to maintaining accurate logbooks.
FBT is a tax imposed by the Australian government on certain benefits provided to employees in addition to their salary or wages. These benefits, known as fringe benefits, can include the provision of motor vehicles, housing, loans, entertainment, and more. The aim of FBT is to ensure that employees pay tax on the non-cash benefits they receive from their employer.
One of the most common fringe benefits provided by employers is the use of motor vehicles for private purposes. If your business provides employees with company cars or other vehicles that are available for private use, you may be liable for FBT.
To accurately calculate FBT liability for motor vehicles, employers must keep detailed records of vehicle usage, including both business and private kilometres. This is where logbooks come into play. A logbook is a written record of all trips made in a vehicle over a specified period, for a minimum of 12 weeks. It should include details such as the date of each trip, the purpose (business or private), the starting and ending odometer readings, and the total kilometres travelled.
Navigating FBT and reporting requirements for motor vehicles can be a daunting task for many businesses – with more to consider than we have touched on in this article.
In general, businesses should consider careful planning, education, and with the right tools in place, you can streamline the process and ensure compliance. It’s also advisable that you seek advice from an experienced tax professional.
If you have questions about how FBT applies to your business, or need help implementing the right systems, reach out for a free consultation today.
