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About Fringe Benefit Tax (FBT)
What is a Fringe Benefit?
An example is when a company provides a vehicle
to an employee, and it is available for personal use,
this is considered a fringe benefit, or perk and
needs to be taxed under the Fringe Benefit Tax
regime. There are however some instances where
the vehicle is exempt from the tax.
General Exemptions:
General exemptions apply to:
•
Work-related vehicles not available for
private use
•
Work-related vehicles with limited private
use (partial exemption)
•
Vehicles stored on the employer's premises
•
Vehicles over 3,500 kilograms.
Work related vehicles not available for general
use are where employees, or shareholder –
employees, store the vehicles at home and the
employer doesn’t allow the vehicles to be available for general private use.
Work related vehicles must also meet the following
four criteria:
1)
The principal design of the vehicle cannot
be for carrying passengers. This means that no
sedans (unless the sedan is a taxi) qualify.
Vehicles that can qualify include utes, light pick-up
trucks, taxis, minibuses and vehicles with rear
doors, that are permanently without rear seats
or have rear seats that are permanently secured
down and are unusable (vans, station wagons,
hatchbacks, panel vans and 4WD’s).
2)
The employer’s name, logo, acronym or
other business identification must be permanently
and prominently displayed on the exterior of the
vehicle.
3)
The employer must notify employees in
writing that the only private use the vehicle is available for is travel between home and work and travel
incidental to business travel.
4)
The employer must record checks carried
out at least quarterly on each vehicle the exemption
is claimed for, to ensure the restriction is being
followed
Partial Exemption
If a work related vehicle meets the four conditions
and isn’t available for private use most of the week
but, allowed for some private use on certain days
(such as Saturday, Sunday and Public holidays)
partial exemptions apply.
Daily Exemptions
Emergency Calls
A motor vehicle is exempt from fringe benefit tax for
the whole day of any day on which an employee
uses it to attend an emergency call. The visit must
be for one of the following purposes:
- to attend some essential plant or service of the
employer or a client
- to maintain services of a public or local authority
- to supply energy or fuel to the public
- to attend in relation to a person's health or
safety.
In addition, the visit must take place between 6 pm
and 6 am Monday to Friday, or any time on Saturdays, Sundays or statutory holidays. These time
restrictions do not apply when the visit concerns
personal health or safety.
Out of Town Travel
When an employee is required to travel, the motor
vehicle is exempt from fringe benefit tax on trips
that are longer then 24 hours. This exemption
includes the day of departure and the day of return.
Private use that is incidental to travel may qualify
for an exemption. However, if private travel is a
significant part of the trip, the vehicle is subject to
fringe benefit tax for all days of travel.
Other days not liable:
Where a vehicle is not available to an employee for
one completed 24 hour period due to breakdown or
being repaired or leaving the vehicle at the airport
carpark (business related flight), these days will
qualify for exemption.
Records
Adequate records must be kept to support exemptions claimed.
P 0800 428 847 www.fleetsmart.co.nz
Questions & Answers’s
1) Who needs to complete
an FBT Form?
If you have been listed as a driver of a vehicle (or
vehicles) that is considered to be liable for FBT
during a quarter, you will be required to complete
the online form. It may be that you were the driver
of the vehicle for less than the full quarter.
You will still need to complete the form up to the
last date you had access to the vehicle – even if it’s
just one day.
2) When does the FBT Form
need to be completed?
This process needs to be completed quarterly each
year. The quarters run from:
Quarter 1
Quarter 2
Quarter 3
Quarter 4
01 January to 31 March
01 April to 30 June
01 July to 30 September
01 October to 31 December
3) What is the date my FBT
Return is to be completed
by?
4) What if the vehicle has
changed owner and I have a
new vehicle OR I have just
taken over the vehicle?
If you have used the vehicle within the current quarter you will need to complete the FBT form for those
days that the vehicle was not available for personal
use, regardless of the period for which the vehicle
was in your posession.
If you did not use the vehicle or have changed
users within the previous quarterplease notify
us at fbt@fleetsmart.co.nz.
7) Can FleetSmart
complete the FBT Form on
our behalf?
No. It is the sole responsibility of the user/driver
to complete this FBT process in order to enable
your company to comply with IRD requirements.
Useful Websites/Links for
more on FBT
Questions and Answers re FBT http://www.ird.govt.nz/fbt/fbtfaq-faq.html Official
5) I have lost the link can you
resend it?
IRD Guide on FBT – pages 11 to 20 have
more details on exemptions, record keeping
and motor vehicle FBT calculations and
valuation methods available.
Yes we can. Please contact us at
fbt@fleetsmart.co.nz
http://www.ird.govt.nz/formsguides/number/forms-400-499/ir409-guide-fbt.html
6) Can we get an extension?
No. IRD have a given period for the returns to be
submitted in or penalties apply
Note: This document has been created for FleetSmart Customer
use and should not be used as a legal document. For further
information on FBT please refer to your accountant or the Inland
Revenue Department.
All returns are to be completed by the 5th calender
day of the month following the end of the quarter. If
the completed FBT form is not received by the due
date, the full FBT payment for the quarter will be
applied to the vehicle.
P 0800 428 847 www.fleetsmart.co.nz
How to Complete FBT online?
Welcome to the “How to”
for completing your FBT
online.
If you have questions on FBT- What it is and
how it applies to you then please refer to our
‘about FBT’ link- here.
FLEETSMART FBT
FLEET
Step One:
Click the boxes that apply to your company
(multiple or singular)
Click ‘Next’ once completed
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P 0800 428 847 www.fleetsmart.co.nz
How to Complete FBT online?
Step Two:
Enter Exempted reasons for each date by clicking on the date required, a comment box will appear with a
drop list of all your reasoning.
Once completed hit the “Save & Complete” button. Tick the accepted box and type your name. This will
confirm to FleetSmart that the FBT form has been completed, a confirmation page should appear.
Tip 1:
Where you have one reason
for multiple daysHold the “Ctrl” key while
clicking on each relevant
date.
Tip 2:
You can use the exempt
button at the top of the table
for bulk exemptions.
- Exempt Quarter
- Exempt Weekends
- Exempt Month
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P 0800 428 847 www.fleetsmart.co.nz