A company’s fleet is one of the biggest assets in the business, yet for many, it is often incorrectly monitored or managed ineffectively – especially when it comes to Fringe Benefits Tax (FBT). Changes to Australia’s Fringe Benefit Laws surrounding the introduction of strict new limits on the private use of work vehicles has meant that your business could end up with an FBT problem without realising.
What is FBT?
Providing company vehicles for your employees is quite common, if the business provides work vehicles to employees for private use – whether it’s cars, vans, 4WDs or utes – then it is liable for Fringe Benefits Tax (FBT). The taxable value of a car fringe benefit is designed to reflect an employee’s ‘private use’ of the vehicle (as only private use is subject to FBT).
There are two methods used to calculate FBT for your fleet:
The Summit Fleet FBT suite of tools and calculators are geared to provide businesses with an entire FBT management solution. The tools that are available for businesses to compare and analyse the potential cost reductions are the FBT Comparison Report Calculator, FBT Simulator and the Summit Connect™ Elogbook product for operating cost management.
These tools work together to equip our customers with practical insight to assess each vehicles optimal reporting method when it comes to managing and calculating FBT.
FBT Comparison Report Calculator
The Summit Fleet FBT Comparison Report Calculator will assist with making decisions on how to handle the company’s FBT liability, highlighting ways in which the company could potentially reduce FBT payments.
The FBT Comparison Report Calculator is a responsive mechanism for comparing Operating vs. Statutory FBT methods for customers on a per vehicle basis, showing overall the most cost effective option, and breaking down the different attributes of FBT. This can include ‘days unavailable’ as well as more complicated information such as depreciation and repair costs in the event that some of the vehicle data and information is not held by Summit Fleet.
The FBT Comparison Report Calculator has been built to comply with the Australian Tax Office’s requirements.
The FBT Simulator
An effective “desktop analysis” tool is the FBT Simulator, it can demonstrate potential FBT savings comparing Operating vs. Statutory FBT methods. Up to 10 different vehicles and multiples/scenarios for both calculation methods can be assessed at once, the output shows the Fringe Benefits taxable result from the Statutory and Operating Cost Methods including an adjustable input for the % of business use of a vehicle, a comparison between the two methods and the lowest cost method per scenario.
eLogbook Technology Support
If a company has validated that an FBT logbook solution is viable or want to move from the onerous administration of manual logbooks. Summit Fleet can assist in facilitating collection and consolidation of this critical information through our ELogbook product via our Summit Connect™ telematics platform.
The principal use of Elogbook is to determine the vehicle business use % for FBT assessment. Uniquely this product pushes trip information to drivers automatically, with a simple trip purpose update being the only engagement needed to assess the business use % and an opportunity to reduce FBT.
If you’re compiling your annual FBT information and wondering if there is a better way to do it whilst exploring cost reduction in this area, Summit Fleet would be happy to let you assess our FBT suite of products.
Disclaimer: The information in this article is provided as a guide only and should not be taken as Taxation Advice. Summit Fleet recommends that you obtain independent advice from your accountant or tax expert when making a decision on the impact of Summit Fleet’s Suite of FBT products and reporting.
