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 employer clients provide dual cab utes to staff to complete their duties and the vehicle is available for personal use, then the benefit may be subject to FBT.
By understanding how your clients' employees use their dual cab utes, you can work out if FBT applies and help them meet their FBT obligations.
When FBT doesn't apply
To qualify for an exemption, 2 conditions must be met. The dual cab ute 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 your clients' work dual cab ute doubles as the family taxi or is used for weekend personal trips, it's not exempt. You need to check their FBT obligations to ensure compliance.
When FBT applies
If an employee's personal use doesn't meet both exemption conditions, your client will be liable for FBT.
Help your clients understand their FBT obligations and get ready for the upcoming reporting period by helping them to:
- ensure they keep accurate records – even if the benefit is exempt from FBT because of limited private use, your clients need to keep records to support this
- work out the taxable value of the fringe benefit and calculate their FBT liability
- lodge their FBT return and pay the amount they owe
- report the reportable fringe benefits on each of their employee’s income statement or payment summary.
You can find more information to support you and your clients at Exempt use of eligible vehicles.