EV (electric vehicle) News & Discussion

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3963 posts

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#2702877 6-May-2021 11:53

afe66: $5 says nothing really changes.

Will continue the previous national government policy of no road user charges(you know the apparently anti green one).

Remove the fringe benefit tax on new ev to encourage businesses.

Yeah, It seems highly probable that the RUC exemption will be extended.

Other one seems plausible too. Having tax breaks on double cab utes, but not EV's is a very easy place for the media to call out the government on environmental grounds.

Should note that the government has already passed the clean car standard. This is far more powerful than the feebate scheme, but sadly dosn't kick in for a few years (but sadly a incentive to buy utes / vans is baked into that too).

Now is probiably a good time to hike fuel tax too. Fuel prices are currently well below historic highs, and aren't collecting enough to cover the money spend on the land transport. Government will be concerned about regressive impacts for fuel taxes though...

Hopefully something bigger for EV's given the strong words around climate change in various political speeches, but I will wait and see.

Jaxson

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#2702881 6-May-2021 12:07

How much is a standard petrol car annual license registration cost?

Not paying that (because it's an EV) would save you how much?

Hybrid over petrol option looks to be about 10-20% more, so say $5,000 perhaps more over ICE.

EV over petrol engine looks to be around 50-100%+ more, so say $25,000 minimum more over ICE.

If we're talking about $500 less per year then I'm sorry but that's complete BS as a realistic incentive.

mudguard

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#2702884 6-May-2021 12:39

Scott3:
afe66: $5 says nothing really changes.

Will continue the previous national government policy of no road user charges(you know the apparently anti green one).

Remove the fringe benefit tax on new ev to encourage businesses.

Yeah, It seems highly probable that the RUC exemption will be extended.

Other one seems plausible too. Having tax breaks on double cab utes, but not EV's is a very easy place for the media to call out the government on environmental grounds.

Should note that the government has already passed the clean car standard. This is far more powerful than the feebate scheme, but sadly dosn't kick in for a few years (but sadly a incentive to buy utes / vans is baked into that too).

Now is probiably a good time to hike fuel tax too. Fuel prices are currently well below historic highs, and aren't collecting enough to cover the money spend on the land transport. Government will be concerned about regressive impacts for fuel taxes though...

Hopefully something bigger for EV's given the strong words around climate change in various political speeches, but I will wait and see.

In layman terms what is the tax break for double cabs? I would think it would only apply to the self employed?

HarmLessSolutions

969 posts

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#2702897 6-May-2021 13:00

mudguard:

In layman terms what is the tax break for double cabs? I would think it would only apply to the self employed?

To be exempt from FBT a vehicle from page 10 of this PDF (my bold text): https://www.ird.govt.nz/-/media/project/ir/home/documents/forms-and-guides/ir400---ir499/ir409/ir409-2019.pdf

"Exemptions from FBT on work-related
vehicles
An FBT liability won’t arise on any day where a vehicle provided to an
employee is classified as a work-related vehicle.
It's important to note that not all business vehicles are work-related
vehicles for FBT purposes. To qualify for the work-related vehicles
exemption from FBT all four of the following requirements must be met.
1. The vehicle must be a motor vehicle, which is defined as:
• a vehicle drawn or propelled by mechanical power, including a
trailer, and
• does not include vehicles with a gross laden weight of more than
3,500kg.
2. Business identification regularly used by the employer (or owner, if
vehicle is rented) must be permanently and prominently displayed
on the exterior of the vehicle. This may include a name, logo
acronym or other business identification. Magnetic or removable
signs aren't enough, and neither is signwriting on a removable part
of a vehicle (such as a pick-up's removable canopy or a spare wheel
cover).
3. The exclusive design of the vehicle must be to carry goods, or
goods and passengers equally. If the vehicle is designed mainly to
carry passengers, it won’t meet this requirement.
Vehicles that may qualify:
• Utes (including extra cabs and double cabs).
• Light pick-up trucks.
• Vehicles with rear doors that are permanently without rear seats
such as vans, station-wagons, hatchbacks, panel vans and fourwheel drives. This also applies if the rear seats have been welded
down or made unusable because of a permanent fixture, such as
shelving, covering the entire rear seat area.
• Taxis, including sedans and station-wagons (the rear seat
requirement stated above doesn't apply to taxis).
4. You must notify employees in writing that the vehicle isn’t available
for private use, except for:
• travel between home and work that is necessary in (and a
condition of) their employment
• travel incidental to business travel (eg, passing by the bank on
the way home from work).
We suggest you give employees a separate letter explaining this
restriction rather than simply mentioning it as another clause in an
employment contract"

https://www.harmlesssolutions.co.nz/

SaltyNZ

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#2702904 6-May-2021 13:30

I would think the primary use of the vehicle should come into consideration as well. It might still make sense for a tradesman to get an FBT exemption on a double-cab ute when it used to pick up other passengers on the way to a site. But if the primary business purpose is for passenger travel - i.e. it is simply a company car and a sedan would do just as well - then the exemption should not apply.

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Scott3

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#2702906 6-May-2021 13:38

Summary of the above is that Utes are the only non taxi vehicles with 5 seats that qualify for the FBT (Fringe Benefit Tax) exemption.

Means as long as a bunch of criteria a met, a company doesn't have to pay FBT tax for the employee to drive a ute to and from work (incl incidental travel, such as going to sports practice on the way home). If the employee was issued say a 5 seat Nissan leaf rather than a ute the employer would need to pay FBT... Likewise if the employer offered to pay for the workers public transport fares.

Quite common for company owned Utes issued to a single person to have 2 days a week, plus holidays FBT paid. Means that the ute can legitimately be used to launch the boat in the weekend, and be taken on holiday, but taking advantage of the FBT exemption 5 days a week...

Obviously the above means that it is more tax efficient for many businesses to buy utes as company cars, even for staff like Accountants, professional engineers etc, who's roles don't require carrying large things.

Scott3

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#2702908 6-May-2021 13:53

SaltyNZ:

I would think the primary use of the vehicle should come into consideration as well. It might still make sense for a tradesman to get an FBT exemption on a double-cab ute when it used to pick up other passengers on the way to a site. But if the primary business purpose is for passenger travel - i.e. it is simply a company car and a sedan would do just as well - then the exemption should not apply.

A bit harder to establish than the current criteria. Say I run a accountancy business But need the ability to collect 20 boxes of files at a time from clients, or need to pick up 10 boxed computer monitors at a time as I don't trust couriers...

Historically it was self policing as utes were so uncomfortable, noisy and slow they weren't commonly used as daily drivers, but modern utes now are acceptable to many in those areas.

Should note the current rules arn't great even in the absence of EV's. Why should a 5 seater ute be treated better tax wise than a 5 seater van. Both have similar payload and cargo space... (van might be better on the latter). If a tradie perfers to drive a hatchback and tow a trailer, why should that be taxed more??? On an interesting note I recently sold my 2006 corolla hatch to a tradie who has sold his ute to fund a house purchase and wanted a cheaper option to get the same job done...

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HarmLessSolutions

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#2702909 6-May-2021 13:53

Scott3:

Summary of the above is that Utes are the only non taxi vehicles with 5 seats that qualify for the FBT (Fringe Benefit Tax) exemption.

Means as long as a bunch of criteria a met, a company doesn't have to pay FBT tax for the employee to drive a ute to and from work (incl incidental travel, such as going to sports practice on the way home). If the employee was issued say a 5 seat Nissan leaf rather than a ute the employer would need to pay FBT... Likewise if the employer offered to pay for the workers public transport fares.

Quite common for company owned Utes issued to a single person to have 2 days a week, plus holidays FBT paid. Means that the ute can legitimately be used to launch the boat in the weekend, and be taken on holiday, but taking advantage of the FBT exemption 5 days a week...

Obviously the above means that it is more tax efficient for many businesses to buy utes as company cars, even for staff like Accountants, professional engineers etc, who's roles don't require carrying large things.

And assuming the rules are still the same as our experience with FBT as a small business back in the early 1990s the vehicle value that the FBT is calculated on does not depreciate. You therefore get the situation where you are paying FBT on the vehicles original purchase (new?) price for as long as the business owns it. Pretty crippling paying FBT on a $50K vehicle when its depreciated (book) value is a fraction of that amount!

The system seemed to encourage frequent updating of vehicles which many small businesses aren't necessarily going to do, especially if the vehicle has specialist fit-out or signage.

https://www.harmlesssolutions.co.nz/

wellygary

8312 posts

Uber Geek

#2702918 6-May-2021 14:16

Scott3:

Summary of the above is that Utes are the only non taxi vehicles with 5 seats that qualify for the FBT (Fringe Benefit Tax) exemption.

Yip, that's the nub of the Beef,

What is interesting is that Utes will still likely get a cruisier ride under the Clean car standard as they get lumped in with Vans while SUVs are in the car category....

The other interesting thing to watch is will Telsa lower its NZ prices because the new standard rules, or will they just pocket the profits from the on selling of the "0 emission credit" tot other manufacturers who can apply it to lower their averages...

SaltyNZ

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2degrees

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#2702972 6-May-2021 14:51

Scott3:

A bit harder to establish than the current criteria.

Yeah that's a fair point. Rules where intention must be taken into account are generally easy to game.

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kingdragonfly

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#2703057 6-May-2021 19:30

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Asian Petrolhead

GV27

5896 posts

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#2703139 7-May-2021 07:47

Scott3:

Summary of the above is that Utes are the only non taxi vehicles with 5 seats that qualify for the FBT (Fringe Benefit Tax) exemption.

Means as long as a bunch of criteria a met, a company doesn't have to pay FBT tax for the employee to drive a ute to and from work (incl incidental travel, such as going to sports practice on the way home). If the employee was issued say a 5 seat Nissan leaf rather than a ute the employer would need to pay FBT... Likewise if the employer offered to pay for the workers public transport fares.

Quite common for company owned Utes issued to a single person to have 2 days a week, plus holidays FBT paid. Means that the ute can legitimately be used to launch the boat in the weekend, and be taken on holiday, but taking advantage of the FBT exemption 5 days a week...

Obviously the above means that it is more tax efficient for many businesses to buy utes as company cars, even for staff like Accountants, professional engineers etc, who's roles don't require carrying large things.

Just on that, you have to meet all the criteria for a vehicle to be exempt. The supposed tax efficiency really comes from failing to apply the rules as they are written, which is ironic as this seems to even catch even tax commentators out:

https://baucher.tax/is-that-ute-really-exempt-from-fbt/

Worth pointing out that the rules around small companies and FBT on vehicles were changed a few years ago so that many companies can have two FBT-exempt work vehicles no matter what they are, with the caveat that usage is apportioned, from memory.

And on FBT: Why the hell are we not exempting EVs from FBT? You could even set a maximum taxable value if you're worried about subsidising the Teslarati.

wellygary

8312 posts

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#2703508 7-May-2021 16:35

Looks like there is a shift underway in the NZ EV fleet, with more and more New EVs being registered, while the Used imports appear capped.

In the first 4 months 1,046 news EVs were registered compared to 916 used EVs...

The Leaf's day as the "go to" maybe coming to an end...

https://www.transport.govt.nz/statistics-and-insights/fleet-statistics/monthly-ev-statistics/

jarledb

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#2703531 7-May-2021 17:41

So here are the full stats of models sold (Created a Google sheet for them). And you are right about the numbers :D

Quick look:

Used Leafs registered so far in 2021: 814 (of a total of 916 used pure EVs)

Total new EVs registered so far in 2021: 1046 (With Tesla Model 3 being the most sold with 394).

Oh and there is a total of 1 - ONE - Hyundai Ioniq 5 in the country. Wonder if that is a UK import or a demo car?

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mattwnz

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#2703534 7-May-2021 18:03

Interesting. Is there a toyota landcruiser EV?

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