Looking for some advice on fringe benefits tax… I talked to my accountant, but honestly, I didn’t get what she meant.
I have a small company that I ran by myself until two years ago. I invited two employees to join me as partners.
Things are going well, but when I started partnering, I stopped paying all my car costs through the business. I’m considering having the business cover my car expenses again, like registration, fuel, insurance, and so on.
The car is mine, but I use it for work about 90% of the time. How does FBT work in this case? If my car costs around $10,000 in a year, what would I need to know?
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Is this the same car you used before you brought in partners? If you initially used actual expenses, the business can reimburse you tax-free for the work-related percentage of the costs over the vehicle’s life. So, if 90% of your logged miles are for business, you can get reimbursed for 90% of the gas, insurance, depreciation, and repairs. Don’t forget to keep a mileage log.
If in the first year you used a per-mile rate, the business can reimburse you that rate for every business-related mile logged.
Finch said: @Charlie
Yes, it’s the same car. I’ve had it for a few years.
In that case, check how you recorded and deducted these expenses in the past… This will help you determine if you can still use the per-mile method or if you’re stuck with actual expenses from the start.