Important update - proposed changes to FBT on cars will not proceed
The Coalition has pledged that the proposed changes to remove the statutory formula method for calculating Fringe Benefits Tax on vehicles provided for business and/or private use of an employee announced by the former Labor Government will not proceed under a Coalition Government.
This means that the statutory fraction will remain at 20% and companies can continue to use the statutory fraction or can elect to use the operating cost method and maintain a log book for an appropriate and representative 12 week period.
Accordingly, for novated leases that were entered into from Wednesday 17 July 2013, employers can elect the most appropriate method for calculating Fringe Benefits Tax on company provided vehicles.
The removal of the statutory formula method will no longer come into effect from 1 April 2014.
To read an open letter from Tony Abbott and Joe Hockey confirming this commitment, pleaseclick here.
The operating cost method remains unchanged.