Company Motor Vehicles - Latest FBT Changes

Company Motor Vehicles - Latest FBT Changes

When a Company vehicle is available for private use
it is subject to Fringe Benefit Tax (FBT). FBT is
calculated on 20% of the original cost of the vehicle
with the FBT tax rate generally being 49.25%.

From 1 April 2017 the IRD has modified the rules so that when a close Company purchases a vehicle they have the option to keep a log book and claim vehicle expenses based on an apportionment of business/private use. Certain rules apply here:
• This method can only be used when the only (fringe) benefits supplied by the Company is at maximum 2 vehicles to shareholder-employees. This means that if other fringe benefits are provided to employees or vehicles are provided to non shareholders this method cannot be used.
• The vehicle must be purchased after 1 April 2017 to use the new rules.
• A vehicle log book must be kept for a minimum of 90 days, once every 3 years to determine the business portion of expenses.

Wednesday, 8th November 2017

"As a real estate salesperson operating in Hamilton, I have found it vital to have a great accountant. Not content with selling just the occasional property, I have been single-minded about operating an efficient, healthy and growing business. This has meant performing at high levels while providing outstanding service to every client. To help me achieve this, I have invested in building a team of support staff, which currently consists of two staff members in selling roles and one in administration. We see DB Chartered Accountants as an integral part of our team as they are a “one stop shop” looking after all the book-keeping aspects of the business.

DB Chartered Accountants take care of all my tax and reporting requirements, from GST, KiwiSaver contributions and PAYE to end of year books and taxation advice. A lot of my business growth now revolves around time management. By working with DB Chartered Accountants my time input into the accounting side of the business is now negligible, leaving me free to work on my core business rather than be bogged down by the “red tape” aspects.

Pam from DB Chartered Accountants has looked after my accounts for several years now. Previously I had been through three other accountants in the space of two years. I was disappointed by the level of service provided by these firms and after missing deadlines for payments to IRD and dealing with the ensuing penalties, as well as being charged over-zealous fees, I felt very uneasy that nobody was overseeing my needs. I needed better assistance. After leaving the last of these firms, I was referred to what is now DB Chartered Accountants as they were trustworthy and reliable. This could not have been more accurate.

Fortunately my previous experiences are behind me and I now get a courteous reminder from Pam when a deadline is looming and action is required – and I no longer fear unjustified bills arriving in the letter box from my accountant. I enjoy working with the firm and am known by name by most of the staff which gives me confidence that I am being properly looked after. I appreciate being able to pick up the phone and call when I have questions. I would recommend working with DB Chartered Accountants without hesitation."

Vaughan Heslop,
Lodge Real Estate MREINZ
REINZ Top 10 Regional Salesperson Award Winner
Waikato/Bay of Plenty/Taupo Districts
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