There's a common myth that dual cab utes are automatically exempt from fringe benefits tax (FBT). However, that's not the case.
If your business provides dual cab utes to your employees to complete their duties and the vehicle is available for personal use, then the benefit may be subject to FBT.
Knowing how your employees use their dual cab utes outside of work will help you determine when FBT applies so you can meet your FBT obligations.
When FBT doesn't apply
To establish if you or your employees' use of a dual cab ute is exempt, there are two conditions that must be met. The dual cab must be:
- an eligible vehicle, which means it's designed to carry:
- a load of one tonne or more, or
- more than 8 passengers (including the driver), or
- a load under one tonne and not primarily designed for carrying passengers
- only used for limited private use (i.e. minor, infrequent and irregular), such as the occasional trip to the tip or helping a mate move house.
So, if you or your employee use the dual cab ute as the family taxi or for weekend personal trips, it's not exempt and FBT applies. Check your FBT obligations to ensure compliance with FBT requirements.
When FBT applies
If your employee's personal use doesn't meet both exemption conditions, your business will be liable for FBT. Even if the benefit is exempt from FBT because of limited private use, you need to keep records to support this.
If FBT applies, you need to:
- keep accurate records
- determine the taxable value of the fringe benefit
- calculate the amount of FBT to pay
- lodge an FBT return and pay the FBT owning
- report the employee's reportable fringe benefit through Single Touch Payroll or on your employee's payment summary (if the aggregated taxable value of their reportable fringe benefits is more than $2,000 in the FBT year).
Find more information at Exempt use of eligible vehicles.
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