FBT changes a Win for shareholder-employees vehicles
There has been some positive changes regarding companies with motor vehicles that are being used for both business and private use by shareholder-employees, which often fall under the FBT rules. However, new rules came into effect from April 2017 that are very beneficial, if you fit the bill.
The old rules that applied prior to April 2017, if you are a company and provide a company vehicle to a shareholder employee, FBT will be payable.
From the 2017-18 income tax year onwards some companies can elect to opt out of the FBT rules, and why wouldn’t you, if you can!! To be eligible the company must only have one or two motor vehicles available for private use by the shareholder-employees, the vehicles must have been purchased after 1st April 2017 and there are five or fewer shareholders. You then claim vehicle costs based on the amount of actual business use i.e using a log book to figure out the split between business and private. You need to keep a log book for at-least 3 months to cover you for 3 years.
This rule only applies to shareholder-employees. FBT still applies to vehicles provided to employees.
Give Kelly a call (03 928 4066) to see how and if this would apply to your business.