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FBT and business vehicles

Business owners who make a car (leased or owned) available for employees to use for private travel may be subject to fringe benefits tax (FBT).

If a car is garaged at or near your employee’s home, even if only for security reasons, it is considered by the ATO to be available for their private use regardless of whether or not they have permission to use the car privately.

Similarly, where the place of residence and employment are the same, the car is considered as private use. Generally, travel to and from work is also private use of a vehicle.

The use of the car is exempt from FBT in some circumstances, i.e an employee’s private use of a taxi, panel van or utility designed to carry less than one tonne if the travel is limited to:
– travel between home and work
– incidental travel in the course of performing employment-related travel
– non-work-related use that is minor, infrequent and irregular

The best way to show the ATO that a car is used for business purposes is by keeping a log book for a period of at least 12 consecutive weeks showing:
– dates of travel
– odometer readings at the start and end of any trips
– the kilometres travelled
– the reason for the trip

Business owners should also keep odometer readings at the start and end of each year, along with details of the operating costs of the car.

Note, company directors are generally considered as employees by the Tax Office, so if directors use the car for private purposes, then FBT could apply.

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News

What to consider when consolidating your super

August 27, 2020

The ATO reported that 45% of working Australians were not aware that they had multiple super accounts in 2016. Having multiple super accounts is particularly common for individuals who have had more than one job. If this is you, it is important to identify and manage your super accounts because having more than one can be costly as a result of account fees from multiple funds.To combat this, you may want to consolidate your super, which moves all your super into one account. Not only does this save on fees, but it also makes your super easier to manage and keep track of.

Before consolidating your super, it is important to do the following:

Research your funds’ policy
Compare your active super accounts so you can make the right choice about which one you should close. Things to assess include:

Check employer contributions
Changing funds may affect how much your employer contributes, as some employers contribute more to certain funds. Check your current accounts to see if changing funds will affect this. Once you have selected a super fund, regardless of whether you choose a new super fund or one of your existing ones, provide your employer with the details they need to pay super into your selected account.

Gather the relevant information
When consolidating your super, you will need to have the following details ready: