29 April 2025

Storing and charging a company vehicle at home – does this give rise to FBT?

Do you allow your employees to take the company vehicle home each night for the purposes of keeping the vehicle in a safe place, or to charge the vehicle from home, ready for the next day at work?

If so, this could have fringe benefit tax (FBT) implications for your business.

Inland Revenue recently released and Interpretation Statement (IS 25/02) which confirms the rule that travel between home and work gives rise to a private benefit and therefore FBT, unless a specific exemption applies.

The document also confirmed that allowing an employee to take a vehicle home for security reasons, or to charge an electric vehicle, does not prevent the travel between home and work from being a private benefit, and therefore subject to FBT, unless an exemption applies.

There are both legislative exemptions and case law exemptions. If one of the exemptions applies, and the vehicle has not been made available for other private use, then taking a company vehicle home for secure storage or to charge overnight may not give rise to FBT.

The case law exemptions are:

  • The vehicle is necessary to transport equipment or instruments that are essential to the employee’s work between the employee’s home and workplace.  The vehicle must be necessary because the bulk, value, sensitivity, or other special characteristics of the goods make it impractical to transport them without the use of a vehicle. Note that if an employer allows employees to take laptops or sensitive information home each night as part of a business continuity plan, that in itself would not be sufficient, or
  • The employee’s work is itinerant, which requires the employee to work at different locations during a workday, or that the sequence of workplaces and the periods spent by the employee at each workplace vary and are unpredictable, or
  • The employee responds to emergency calls at home and their responsibility for the outcome begins before they leave home, or
  • The employee’s home is a workplace or base of operations. To satisfy this exemption, the employee must meet specific criteria. It is not enough for work to simply be carried on at the employee’s home, even if that work is a condition of the employee’s employment contract (e.g., because the employee is required to work from home a day or two a week to reduce the office space needs of the employer).

The statutory exemptions are:

  • The vehicle is a ‘work-related vehicle’, as defined in the tax legislation, and does not include a ‘car’ (also defined),
  • The vehicle is used for emergency calls affecting health, life, or the operation of essential machinery or services, or
  • The employee takes a business trip which lasts for more than 24 hours

Inland Revenue is ramping up its audit and compliance activity, including looking at FBT compliance.  Now would be a good time to undertake an FBT health check to ensure your position is correct going forward.  We can assist with making a Voluntary Disclosure to Inland Revenue if you need to tidy up any prior FBT periods.

How we can help 

If you have any questions in relation to your FBT compliance, or would like our assistance, please contact your Nexia Advisor. If you are not already a Nexia New Zealand client and would like to discuss how our specialist tax consultants can help, get in touch with the appropriate team in Auckland, Christchurch or Hawke’s Bay.

Who are Nexia New Zealand?

Nexia New Zealand is a leading full-service chartered accounting and business advisory consultancy firm, offering the full range of chartered accounting, business advisory, corporate advisory, tax, audit, insolvency, liquidation and receivership services. 

Nexia New Zealand has four offices throughout New Zealand: Victoria Street in Christchurch, Albany on Auckland’s North Shore, Newmarket in the Auckland CBD and Hastings in Hawke’s Bay.

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Shelley-ann Brinkley

Tax Director

Auckland

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Phil Barlow

Tax Director

Auckland

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Jono Boyce

Partner

Christchurch

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Jason Hoseason

Tax Manager

Christchurch

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Ashleigh Gilmour

Partner

Hawke's Bay

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Written by Siew Mei Ou Yang and Shelley-ann Brinkley and

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