There’s a common myth that dual cab utes are automatically exempt from fringe benefits tax (FBT). However, that’s not the case.
If your employer or you as an employer provides a dual cab ute to staff to complete their duties and the vehicle is available for personal use, then the benefit may be subject to FBT.
When FBT doesn’t apply
To qualify for an exemption, 2 conditions must be met. The dual cab ute must be:
- An eligible vehicle, which means it’s designed to carry:
- a load of one tonne or more, or
- more than 8 passengers (including the driver), or
- a load under one tonne and not primarily designed for carrying passengers.
- Only used for limited private use (i.e. minor, infrequent and irregular), such as the occasional trip to the tip or helping a mate move house.
So, if your the work dual cab ute doubles as the family taxi or is used for weekend personal trips, it’s not exempt. You need to check the FBT obligations to ensure compliance.
When FBT applies
If an employee’s personal use doesn’t meet both exemption conditions, the employer will be liable for FBT.
Help your understand their FBT obligations and get ready for the upcoming reporting period by noting the following:
- ensure accurate records – even if the benefit is exempt from FBT because of limited private use, there is a need to keep records to support this
- work out the taxable value of the fringe benefit and calculate the FBT liability
- lodge a FBT return and pay the amount owed
- report the reportable fringe benefits on each of the employee’s income statement or payment summary.
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