ATO finalises position on utes and FBT

ATO compliance, taxation, fringe benefit tax exemptions, work utes

Will you ute remain FBT free?

Early this year in our we considered the ATO’s new stance on the fringe benefits tax implications of work utes.

This applies if you:

  • Provide a ute to your staff
  • Own your ute in your trust or company
  • Are provided with a ute by your employer

The ATO has finalised its Practical Compliance Guideline (PCG 2018/3) regarding when work utes would be subject to fringe benefits tax.

Utes will now be subject to fringe benefits tax if:

  • any home to work travel involves a diversion of more than 2 kilometres or
  • you travel more than 1000km for private purposes during the year or
  • any private trip you make is in excess of 200km

Should you wish to avoid fringe benefits tax you will need to:

  • have a policy which restricts private use of the ute
  • obtain assurance from employees that private travel was limited as outlined above

This new compliance measure could have a significant impact on your business, so please chat to your accountant if you have any queries or concerns about this issue.

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