Sparks are flying this coming FBT year

As an employer, you previously needed to pay fringe benefits tax (FBT) on electric cars provided to your employees. Since 1 July 2022, you no longer need to pay FBT on benefits provided for eligible electric cars and associated expenses.

Getting the green light

You will now be exempt from paying FBT on benefits provided for electric cars that meet all the following criteria:

• the car is a zero- or low-emissions vehicle
• the first time the car is both held and used is on or after 1 July 2022
• the car is used by a current employee or their associates (such as family members)
• luxury car tax has never been payable on the importation or sale of the car.

Registration, insurance, repairs, maintenance and fuel expenses provided for eligible electric cars are also exempt from FBT.

Pump the brakes; it’s a red light

While you may not have to pay FBT on eligible electric cars, there are exclusions including motorcycles and scooters, whether they’re electric or not. Home charging stations are also not exempt (instead there may be a property fringe benefit or an expense payment fringe benefit for these).

It’s reporting time

Despite the exemption, you’ll still need to determine the taxable value of the benefit when working out whether an employee has a reportable fringe benefits amount (RFBA).

If the total taxable value of reportable fringe benefits provided to an employee during the FBT year is more than $2,000, you must report the RFBA through Single Touch Payroll or on the employee’s payment summary.

Your employees can read more about the consequences of having a reportable fringe benefits amount.

Full speed ahead

To help fill the potholes in your electric vehicle knowledge, check out our fact sheet for more information.

If you’ve provided a car that isn’t an electric vehicle to an employee for their private use, FBT applies. FBT can apply to cars, other motor vehicles, car leasing, car parking and road tolls.

Remember, Scott Partners can help you with your tax. Contact us if you have any questions regarding any of the above.

Source: ato.gov.au March 2023
Reproduced with the permission of the Australian Tax Office. This article was originally published on https://www.ato.gov.au/Business/Small-business-newsroom/Employers/Sparks-are-flying-this-coming-FBT-year/?SmallBusNewsroomLanding.
Important:
This provides general information and hasn’t taken your circumstances into account.  It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.