The fringe benefits tax (FBT) year ends on 31 March. Here's what you need to know to help your clients and practice prepare for FBT tax time.
Plug-in hybrid electric vehicles (PHEVs)
If your employer clients provide PHEVs to employees, their families, or associates for personal use, be aware of the following.
Home-charging expenses – new shortcut method
We've updated PCG 2024/2 Electric vehicle home charging rate to include a new method to make it easier to calculate PHEV electricity costs when a vehicle is charged at an employee's home.
To use the shortcut home-charging rate, your clients must meet the eligibility requirements. You can still choose to calculate the actual electricity costs instead of using this optional method.
Eligibility for FBT exemption
Since 1 April 2025, PHEVs are not considered a zero or low emissions vehicle under FBT law and no longer qualify as exempt. If your employer clients provide PHEVs to their employees for private use, or they are available for private use, those clients may now have FBT obligations for the 2025–26 FBT year.
Your clients may continue to be eligible for the electric car FBT exemption if they meet the requirements. Our website has more information about FBT on plug-in hybrid electric vehicles.
Common mistakes to avoid
Getting FBT right the first time can help your clients avoid unexpected liabilities, penalties and additional paperwork. Many mistakes are avoidable, so be aware of some of the common issues that will attract our attention, including:
- lodging a nil FBT return when fringe benefits were provided
- treating private use of work vehicles as business use or failing to report it
- incomplete or invalid records to support exemptions or concessions used, or to show how the taxable value of benefits was calculated
- incorrect reporting of employee contributions to reduce FBT liabilities or reporting at the incorrect label in the income tax return.