Private Use of Motor Vehicles

If you make a vehicle available to an employee, their associated persons, or shareholder-employees for private use, you'll need to pay fringe benefit tax (FBT) whether the vehicle is used or not.

Travel between work and home is generally classified as private use.  Contact us and we can talk you through whether the travel between home and work is deductible, and when travel between home and work will be treated as work-related use (rather than private use or enjoyment) for FBT purposes.

 You are required to keep records for any motor vehicle made available for private use.  If a private use restriction is in place, you must keep a record of quarterly checks to make sure the vehicle isn't used for unauthorised private use.

 There are exemptions for FBT if the vehicle is a work-related vehicle.  Adequate records must be kept to support the days claimed as FBT exempt under the work-related vehicle exclusion.

 Inland Revenue's FBT guide has more information on general and daily motor vehicle exemptions.

 NB:  Sole traders and partners in a partnership don't pay FBT on business vehicles they use.  Instead they make income tax and GST adjustments for private use.


Contact us for more information on FBT and private use of motor vehicles.

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