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  #1988285 4-Apr-2018 16:28
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There are accountants and then there are accountants. And some of them are quite expensive if you don't ask them your question the right way.

1782 posts

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  #1988339 4-Apr-2018 18:39
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Hi KryptonJohn




A few factors that would make a heaps of difference:


- You have said it is in a company. So, if it is available for private use, you should be paying FBT on the vehicle as well (an additional cost). Some accountants do a 'private use adjustment' where you the person effectively pay for the use of the vehicle to the value of the Fringe Benefit (eliminating FBT in the process).


- FBT is calculated on either the original cost or the current value of the vehicle. The lower the value, the less the FBT.


-Advantages are if you keep it in a GST-registered company you will get to claim GST on the running costs (100% of the running costs!). Also, along with the running costs that you pay out, you should be able to claim Depreciation (the reduction in value of the asset for that year). Normally, we use 30% per year for vehicles.




For your mileage rate claim - you are partial correct. The mileage claim that you put in would be added as an expense to the company's expenses. So, an extra $4,380 in expenses to reduce any income (but there is no GST on this expense). It may not be advantageous for you not to do this...




Alternatively, you can own it in your own name, keep a logbook, and claim the business percentage of running costs (and depreciation). No FBT, but you do only get to claim the business portion of costs and GST. If the portion is very high, then there will be some advantages. If it is a low business use, then forget it.




Run the numbers past your trusty accountant... Hopefully it hasn't made your head hurt more...



Again, these rules have changed slightly for vehicles bought after 01/04/17 for closely-held companies. 


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  #1989045 5-Apr-2018 20:32
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Yes the rules have changed for closely held companies. A logbook can be kept instead and avoid fbt. So, it is like owning it in your own name but you only get to claim the business use. Sometimes paying fbt can be worth it if your original cost price is low.

And wait for it... There is a new discussion document out that will create new tiers of mileage rates depending on level of usage. To be finalised in May. EVs will have their own rates.

Sigh, changes all the time!

Sorry, probably slightly off topic now!

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