If an employer allows an employee private use of a vehicle, FBT generally applies.
There is an exemption from FBT for panel vans, utilities and other commercial vehicles, but only if the employees private use of these vehicles is limited to:
- Travel between home and work
- Travel that is incidental to travel in the course of duties of employment
- Non-work-related use that is minor, infrequent and irregular
- The employee uses the vehicle to travel between their home and their place of work and any diversion adds no more than two kilometres to the ordinary lengthy of that trip
- For journeys undertaken for a wholly private purpose, the employee does not use the vehicle to travel more than 1,000 kilometres in total per year and no return journey exceeds 200 kilometres.
You may be familiar with the exemption for “minor, in frequent and irregular”, but these guidelines quantify what the Commissioner of Taxation expects – quite limiting!