Are utes and panel vans exempt from FBT?


Where such vehicles carrying a load of less than one tonne are provided to employees for private use, and that use is considered “minor, infrequent and irregular,” the vehicles are exempt from FBT.


There has always been uncertainty on the definition of “minor, infrequent and irregular.” The Australian Taxation Office (ATO) recently released Practical Compliance Guideline (PCG) 2017/D4, which provides guidelines on this.


According to the PCG, the following conditions must be met to be able to define use as “minor, infrequent and irregular”:


  1. An eligible vehicle is provided to a current employee
  2. The vehicle is provided to the employee to perform their work duties
  3. The employer takes all reasonable steps to limit private use of the vehicle and have measures in place to monitor such use
  4. The vehicle has no non-business accessories
  5. The vehicle has a GST inclusive value less than the luxury car tax threshold at the time the vehicle was acquired
  6. The vehicle is not provided as part of a salary packaging arrangement
  7. The employee uses the vehicle to travel:


i) Between their home and their place of work and any diversion adds no more than 2 kilometers to the ordinary length of that trip


ii) No more than 750 kilometers in total for each FBT year for multiple journeys taken for a wholly private purpose, and


iii) No single, return journey for a wholly private purpose exceeds 200 kilometers.


If you have any questions in relation to this, please do not hesitate to contact one of our friendly staff on 03 9328 5300 or info@lombardipartners.com.au.