Dual cab utes may attract FBT.
There is an FBT exemption for eligible commercial vehicles, including dual cab utes, but this only applies if private use is limited.
If you’re unsure what is considered limited private use, here are some examples:
• travel between home and work
• travel that’s incidental to the work you do
• non-work travel that’s minor, infrequent and irregular.
If you or your employees drive the work ute to weekend footy matches, towing the boat to go fishing on Sundays, or going on camping trips, it’s likely you’ll go above and beyond the definition of limited private use.
In short, the FBT exemption applies only to vehicles that are predominantly used for work purposes.
If an employee’s use of a dual cab ute doesn’t meet the conditions of limited private use, it’s a car fringe benefit, or residual benefit and FBT applies.
The ATO recommends employers have policies in place to limit the private use of these vehicles.
The ATO uses third party data sources, including motor vehicle registry information to identify FBT non-compliance and penalties may apply.
Remember to check the facts to ensure you don’t end up with an FBT liability you are not expecting.
Find out more at www.ato.gov.au/CarFringeBenefits or talk to a registered tax professional.