• 18.6 Taxable value of motor vehicles other than cars

    If the private use of the vehicle other than a car exceeds the limits set out in section 7.6 of Car fringe benefits, the right to use the vehicle is a residual benefit.

    The legislation doesn't require the same level of detail as is required for valuing car benefits. This takes into account the type of vehicles involved, their expected high business use, and their general lack of suitability for significant private use.

    Detailed log book requirements of the kind specified for calculating the value of car benefits are not required for vehicles other than cars. However, many businesses would maintain some form of log book records and these should be used, where possible, in determining the extent of private use of the vehicle.

    In the absence of such records, soundly based estimates of the number of private kilometres travelled are acceptable. For example, you could determine the home-to-work component of private use by multiplying the number of journeys during the year by the distance between the employee's residence and place of employment.

    There are two methods for valuing the benefit:

    1. Operating cost method - this is the same as the calculation for cars outlined in section 7.5 of Car fringe benefits.
    2. Cents per kilometre basis - this method can be used only where there is extensive business use of the vehicle.

    The following rates are for the 2010 to 2014 FBT years:

     

    Engine capacity Rate per
    kilometre
    2010
    Rate per
    kilometre
    2011
    Rate per
    kilometre
    2012
    Rate per
    kilometre
    2013
    Rate per
    kilometre
    2014

    0 to 2,500cc

    44

    45

    46

    48

    49

    Over 2,500cc

    53

    54

    55

    57

    59

    Motor cycles

    13

    14

    14

    14

    15

    The methods assume that you provide the vehicle on a fully maintained basis, including fuel. Where it is the employee's responsibility to provide fuel, the value of the benefit is based on the operating costs, excluding fuel. If the cents per kilometre method is used and there are no specific records, it is acceptable to multiply the number of private kilometres travelled by the estimated fuel costs per kilometre (based on average fuel costs and average fuel consumption of the vehicle) and reduce the value of the benefit accordingly.

    A reduction for business travel applies only where you obtain a Residual benefit declaration - vehicles other than cars from the employee (refer to Declarations). The declaration must be in a form approved by the Commissioner of Taxation, specifying the deductible percentage of the operating costs - that is, the business proportion of total kilometres travelled. If using the cents per kilometre method, it is acceptable for the declaration to state the number of private kilometres travelled rather than the deductible percentage.

    Example

    An employee takes their employer's one-tonne utility with an engine capacity in excess of 2,500cc home each day and has private use of the vehicle in the evenings and on weekends. The employee has estimated his home to work, evening and weekend travel at 100 kilometres a week (5,200 kilometres a year) and has provided a declaration to the employer. The employee doesn't make any employee contributions.

    The vehicle travelled a total of 52,000 kilometres during the FBT year ending 31 March 2014 and the operating costs, including deemed interest and depreciation, were $20,080.

    End of example

    Cents per kilometre method

    Taxable value = A x B - C

    Where:

    A = number of private kilometres travelled

    B = rate per kilometre

    C = the employee contribution (direct contributions only, not fuel)

    Taxable value = (5,200 km x 59 cents per km) - $0

    = $3,068

    Operating cost method

    Taxable value = A x B - C

    Where:

    A = the total operating costs

    B = the percentage of private use

    C = the employee contribution (direct contributions only, not fuel)

    Taxable value = ($20,080 x 10%) - $0

    = $2,080

      Last modified: 15 Apr 2015QC 17817