Kevin Rudd’s changes to the Fringe Benefits Tax 2014
Kevin Rudd's Changes Cancelled!
Tony Abbott has vowed to reverse all the proposed changes to FBT, meaning the old/existing rules will still apply. Read all about it here: Salary Sacrifice Reinstated Across Automotive Industry.
- Car FBT tax applies to cars which are either an employer provided car used for for work and personal use OR a salary sacrificed car which is privately owned.
- To work out the benefit you could claim you can use one of two methods, either the operating cost method (using a log book) or the statutory formula method.
- The operating cost method is when you multiply the cost of running the car by the percentage of personal use of the car.
- The statutory method is simpler, you just multiply the capital cost of the car by 20% to work out the total benefit you can claim.
Changes Kevin Rudd Wants To Make
- Scrapping the statutory method.
- This means that businesses will have to use the log book method, and will only be able to claim a benefit for the actual amount of the cars usage. Increasing the time it will take to calculate these figures, therefore increasing admin costs for businesses.
Will it affect your agreement?
- The changes will come into effect from April 1st, 2014. But will apply to all new contracts entered into from July 16 2013. It will not apply to agreements that were entered into before July 16 2013