As we near the end of the Fringe Benefits Tax (FBT) year 2024, it’s important for businesses to stay updated with any changes in FBT regulations. This blog post will cover the crucial information that businesses need to know regarding FBT for the current financial year.
Electric Vehicles (EVs) represent a significant change in the valuation of relevant car fringe benefits. Employers need to understand several key aspects when preparing their 2024 FBT returns. Here are the key takeaways for employers this year with respect to EVs:
Employers must calculate and disclose the Reportable Fringe Benefits Amount for EVs, as if the car had been taxable, in their employees’ income statements. To qualify for the exemption, the EV must meet the following criteria:
- The EV must meet the definition of a car under FBT legislation. Therefore, the exemption does not apply to motorcycles, e-bikes or vehicles designed to carry a load of greater than one tonne.
- It must be a battery electric, hydrogen fuel cell, or plug-in hybrid car.
- It must have been first held and used for the first time on or after 1 July 2022.
- The original retail sale price must be below the luxury car tax threshold ($89,332 for 2023-24).
The Australian Taxation Office released a guideline on 1st February 2024 for valuing the cost of electricity for electric vehicles when charged at residential premises. Taxpayers can apply a rate of 4.20 cents per kilometre provided certain conditions are met.
The Australian Taxation Office (ATO) mandates that all employers must report and lodge an FBT return if they have provided fringe benefits to their employees during the financial year. The FBT return must be lodged by the 21st of May following the end of each FBT year. It is essential to ensure accurate documentation and record-keeping to fulfil these reporting obligations effectively.
To avoid any unnecessary penalties or compliance issues, it is advisable to seek professional advice from tax experts or consult the ATO’s official website for the most up-to-date FBT regulations. By adhering to the guidelines and requirements, businesses can ensure smooth FBT reporting and remain compliant with the relevant legislation throughout the 2024 financial year and beyond.
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Swadhin Behura
One Business Services Team
