FBT change creates confusion and additional work for brokers

by AB23 Jul 2013

A planned federal government change to fringe benefits tax (FBT) claims for cars would increase costs and the administrative burden for brokers and their clients, argues MFAA CEO, Phil Naylor.

"This has created confusion and will increase costs for member finance brokers dealing with clients on this matter and on many business owners themselves. It also increases the administrative workload on businesses and employees,” he says.

Naylor says businesses and financial advisers require certainty and that an abrupt change like this one doesn’t give people confidence that they can make long-term decisions.

 “The changes were developed without any input from industry and will affect the entire automotive supply chain from the manufacturer through to the brokers who give professional advice and provide finance to business,” says Naylor.

FBT is calculated by one of two methods. The so-called statutory 80-20 method assumes 80% of use is for business and 20% is for private purposes.

The planned changes will no longer allow workers to claim a 20% tax concession on the cost of their cars without proof. A log book can be used to record exact usage.

In both cases, private use is subject to FBT which is paid by the company. Under the planned changes, the 80-20 method will be scrapped and log books made compulsory.

COMMENTS

  • by Andrew M 23/07/2013 8:46:19 AM

    I know which party I won't be voting for...

  • by not so old broker 23/07/2013 9:45:36 AM

    Who doesn't keep a log book anyway?
    And it will stop the rorts by those who have 'work cars' which stay at home and go shopping in Mosman or Vaucluse.

  • by Not So Young Broker 23/07/2013 10:15:08 AM

    Grasshopper, (Not So Old Broker) - You need to think this through. What do Holden, Ford & Toyota think about the mixed messages they are receiving from the Government about wanting to maintain a viable car production industry. New car sales will plummet (started already). The next logical step is to sack workers and perhaps exit of more players from the industry? This will have massive flow on effects across the whole industry. Consultation would have been a good idea to try and understand the ramifications of the change. If this was done the change would not have been made. On a side note, this is what happens when a Government is broke, hard and rash decisions are made. Debt ceiling limit is going from $300b to $400b very soon.....