Using the company car outside of work
Just because your business buys a motor vehicle and it is used as a work vehicle, that alone does not mean that the car is exempt from FBT.
If you use the car for private purposes – pick the kids up from school, do the shopping, use it freely on weekends, garage it at home, your spouse uses it – FBT is likely to apply.
While we’re sure the old, “what the ATO doesn’t know won’t hurt them” mentality often applies when the FBT returns are completed, it might not be enough.
The private use of work vehicles is firmly in the sites of the Australian Tax Office.
Private use is when you use a car provided by your employer (this includes directors) outside of simply travelling for work-related purposes.
If the work vehicle is garaged at or near your home, even if only for security reasons, it is taken to be available for private use regardless of whether or not you have permission to use the car privately. Similarly, where the place of employment and residence are the same, the car is taken to be available for the private use of the employee.
Finding out that a car has been used for non work-related purposes is not that difficult. Often, the odometer readings don’t match the work schedule of the business. These are areas the ATO will be looking at.
Watch our blog for further FBT-related news in the lead up to 31 March 2018 or call Carrick Aland in Dalby, Toowoomba or Chinchilla on 07 4669 9800.