Fringe Benefits Tax Time

April 2024 Newsletter - Fringe Benefits Tax time

Employers have to pay Fringe Benefits Tax (FBT) on some benefits (over and above wages and salary) they give to their employees or their associates.

FBT Year
Businesses that provide fringe benefits to employees must lodge an annual FBT Return. The FBT year runs from 1 April 2023 to 31 March 2024, with lodgements and payments for the 2024 year having a due date of 25 June 2024, if HK Partners lodges for you.

A Fringe Benefit
There are various fringe benefits that could be provided to employees, one common benefit is: Allowing an employee to use a work car for private purposes.

Electric Vehicles Exemption
There are several exemptions and concessions available for certain types of fringe benefits, one exemption relates to Electric vehicles.

An eligible electric vehicle meets all of the following:

• The car is a zero or low emissions vehicle,
• The first time the car is both held and used is on or after 1 July 2022,
• The car is used by a current employee or their family members, and
• Luxury Car Tax has never been payable on the importation or sale of the car.

The act defines a zero or low emissions vehicle as:

• A battery electric vehicle
• A hydrogen fuel cell electric vehicle, or
• A plug-in hybrid electric vehicle (up until 1 April 2025).

Electric Vehicle Novated Leases
For employers looking to access the FBT exemption for themselves or on vehicles they provide to their employees, the vehicle will simply need to be acquired or leased in the business name.

For employees looking to take advantage of the exemption, it is best to discuss this with your employer as you will need to enter into a novated lease with your employer.

If you would like to take advantage of this exemption, contact your HK Partners Adviser today on 02 8251 8100.