FBT threat to cars

August 27, 2013 | News | No Comments

Author: Emma Sun
Publication: Ranges Trader Mail

An Upper Ferntree Gully not-for-profit CEO says his organisation will be among many to lose out with the Federal Government’s changes to Fringe Benefits Tax.

Greg Pullen of Catholic Homes, which provides accommodation, residential care and community care to seniors, said they relied heavily on vehicles driven by community care workers to take residents to various places.

The organisation has a fleet of about 40 vehicles that go to and from its numerous locations, one of which is Willowbrooke in Upper Ferntree Gully.

Mr Pullen said as they didn’t have the capacity to store all the vehicles safely, most community care workers took them home.

It also allowed staff to drive directly to clients, which saved time.

But Mr Pullen said that’ was all set to change.

“As the proposal legislation stands, if there’s a purported non-business component, then you’ve got to pay fringe benefits tax on that, and driving the cars between home and work is considered private usage instead of work usage,” he said.

“We’re only a small not-for-profit organisation and we estimate compliance will cost us a minimum of $100,000 per annum and involve a lot more paperwork.

“This means we’ll have to absorb the cost and it’ll mean we potentially provide fewer services to our clientele, so we’re hopeful that common-sense will prevail and there won’t be any sort of change.”

However La Trobe MP Laura Smyth said the government would make the tax system fairer by ensuring the FBT exemption for cars was targeted to actual business use rather than including personal use.

“This ensures a more level playing field for all workers by removing a tax concession for the personal use of a salary-sacrificed or employer-provided car,” she said.

“These reforms will not affect existing contracts – unless they are materially changed, nor will it affect the local employees, self-employed and sole traders that claim work-related expenses in their income tax return when they use their own car for work.

“Furthermore, people in my electorate who use their vehicle for work-related travel will still be able to use a log book to ensure the business use of the car is still exempt from FBT.”