Fringe Benefit Tax question

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Forums › Finance and wealth management › Fringe Benefit Tax question

Geektastic

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#182477 17-Oct-2015 15:20

We presently own through the company 4 vehicles.

Obviously we can't drive 4 vehicles at once etc.

I can't find any concise answer as to how FBT is dealt with in such circumstances. I assume there is some kind of pool system (says so on IRD website) but it does not really explain in simple terms how it works.

Anyone know?

nitrotech

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#1408261 17-Oct-2015 15:42

As I understand it you use the highest value vehicle X number of vehicles X number of days for personal use divided by number of days in the quarter X .05

Quite a cost if you're offering employees personal use.

k1w1k1d

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#1408262 17-Oct-2015 15:44

You need to consult your accountant to get the correct answer for your situation.

Geektastic

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#1408275 17-Oct-2015 16:23

k1w1k1d: You need to consult your accountant to get the correct answer for your situation.

I would if they could be bothered to work the same hours I have to...! ;-)

Geektastic

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#1408276 17-Oct-2015 16:25

nitrotech: As I understand it you use the highest value vehicle X number of vehicles X number of days for personal use divided by number of days in the quarter X .05

Quite a cost if you're offering employees personal use.

If you have 4 vehicles, unless you are out of the country altogether, it seems hard to work out what the personal days would be.

EG if Vehicle A is off the road, B, C and D aren't. Or, if I am driving A, does that mean C, D & E are not available because I cannot possibly drive them at the same time?

MikeB4

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#1408278 17-Oct-2015 16:28

Set aside an hour or two and give IRD a ring

Handle9

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#1408304 17-Oct-2015 17:29

I am not an accountant but my understanding is that it's the number of days that the vehicle is available for personal use that counts, not the number of days that you use it for personal use. Either that or keep a log book so you can define what the fbt liability is.

Are all of the vehicles actually used for personal use? Can you use 2 of them as tool of trade vehicles which would be fbt exempt?

Edit: autocorrect correction.

Geektastic

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#1408305 17-Oct-2015 17:29

MikeB4: Set aside an hour or two and give IRD a ring

Thanks Mike....love you too!

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MikeB4

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#1408308 17-Oct-2015 17:35

Geektastic:
MikeB4: Set aside an hour or two and give IRD a ring

Thanks Mike....love you too!

Yeah I was a bit optimistic it will take a day or two just to reach someone :p

oxnsox

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#1408395 17-Oct-2015 20:49

Handle9: I am not an accountant but my understanding is that it's the number of days that the vehicle is available for personal use that counts, not the number of days that you use it for personal use.

I have worked for a company where we signed a declaration at the end of each month identifying the number of days that the vehicle was 'available for personal use', particularly where these were outside any employee contract agreement.

And whilst your accountant might not work when you need him too, I think you'll find it's an argument that won't wash with IRD. Perhaps it's time for a change of bean counter.

k1w1k1d

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#1408441 17-Oct-2015 22:54

So you are running a business and don't have an accountant?

Even God won't be able to help you when the IRD comes knocking. Ignorance of the law just won't wash with them. Default tax is very expensive!

You need to get an accountant to advise you on tax matters. Taking an hour or two off occasionally to see your accountant is time and money well spent.
A decent accountant can save you money, and give you peace of mind.

Geektastic

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#1408442 17-Oct-2015 22:59

MikeB4:
Geektastic:
MikeB4: Set aside an hour or two and give IRD a ring

Thanks Mike....love you too!

Yeah I was a bit optimistic it will take a day or two just to reach someone :p

Reminds me of a very old Not The Nine O'Clock News sketch in which the Pope performs a miracle live - by phoning British Rail Enquiries and getting an answer!

Geektastic

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#1408446 17-Oct-2015 23:07

Handle9: I am not an accountant but my understanding is that it's the number of days that the vehicle is available for personal use that counts, not the number of days that you use it for personal use. Either that or keep a log book so you can define what the fbt liability is.

Are all of the vehicles actually used for personal use? Can you use 2 of them as tool of trade vehicles which would be fbt exempt?

Edit: autocorrect correction.

It may come to that. Apparently, where a vehicle is kept at the home of a shareholder (me in this case) and absolutely no private use occurs, you can claim an exemption from FBT.

I imagine it is an area of tax with more holes than a Swiss cheese, given that personal use which is 'incidental' (which I presume means for example stopping at New World en route home from a job etc) is allowable. As one of the two shareholders and employees, there is no one but me to determine what is and is not personal use on a day to day basis.

When the accountants grace the office with their presence, I will ask them about this.

UHD

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#1408880 18-Oct-2015 21:52

Geektastic:
k1w1k1d: You need to consult your accountant to get the correct answer for your situation.

I would if they could be bothered to work the same hours I have to...! ;-)

Send them an e-mail. They will reply when they are awake.

Yatey

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#1408939 19-Oct-2015 00:01

Geektastic:

Apparently, where a vehicle is kept at the home of a shareholder (me in this case) and absolutely no private use occurs, you can claim an exemption from FBT.

If a car is used, even used in a private way, by a shareholder, and said shareholder is not an employee of the company, then no FBT will be incurred by the business.

Jordan, Auckland University.
“Design is so simple, that’s why it is so complicated.” - Paul Rand