This article was originally created for Hayes Knight (now Nexia Auckland).
Home > Updates > New FBT Motor Vehicle Interpretation Statement signals a change in practice
A motor vehicle fringe benefit arises when an employer makes a motor vehicle available to an employee for their private use, in connection with the employment relationship. The test is on availability (i.e. it is irrelevant for FBT purposes whether the employee actually uses the vehicle for private use).
Private use of a motor vehicle includes; travel between home and work; and any other travel conferring a private benefit on the employee.
Motor vehicle is broadly defined as a vehicle drawn or propelled by mechanical power, including a trailer, which does not have a gross laden weight of more than 3,500kg, but excludes:
Interesting points to note in relation to “work-related vehicles”:
No FBT arises if a motor vehicle is used by an employee to make emergency calls. Note that:
The business travel exemption applies when an employee is required, in the performance of their duties, to be absent from home with a vehicle for at least 24 hours. The exemption will only apply if the employee is required, in the performance of their duties, to use a vehicle and regularly be absent from home.
The requirement for the employee to be absent from home “with” the vehicle was introduced in 2004 and departs from the previous meaning which did not contain this requirement. As such the view expressed in the IS departs from the Commissioner’s previously published view in “Cars parked at airport carparks”. If you have left the car at the airport while travelling overseas or outside of your home town, FBT will apply on those days (even though the average person would expect the vehicle is not available on those days). This seems to be an odd position. It is unclear what “mischief” the Commissioner is trying prevent.
Please contact Phil Barlow, Shelley-ann Brinkley or any of the team at Hayes Knight if you would like to discuss your FBT obligations further.