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


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"Kessels & Associates Ltd (trading as Kessels Ecology) has been a very satisfied client of DB Chartered Accountants for several years now. We appreciate the professional yet approachable manner of David, Pam and the rest of the team. They have a genuine interest in our business – a small but busy environmental science service consultancy - and are always on hand to assist. We value being able to regularly meet with David and to assess how the business is tracking one on one, with the opportunity to discuss future plans and options. David is also able to provide advice on a broad range of business development and strategy matters, which we’ve greatly valued. We can’t recommend David and his team highly enough."
 
Gerry Kessels & Helen Percy
Directors
 
 
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