How to eliminate FBT on your company car Posted on January 13, 2023
How to eliminate FBT on your company car?
Are you sick of paying as much as $9,000 fringe benefits tax (FBT) on your company car each year? There is a solution. The Government is exempting FBT on all electric cars and plug in hybrids, purchased after 1st July 2022. The purchase price must be less than $84,916. The incentive stems from the Government’s low emissions policy and is a clear message that the government is serious about electric cars dominating the Australian highways. Company directors who have cars with minimal work-related use, pay approximately 20% of the purchase price of the vehicle in FBT. This can range between $9,000 – $12,000 in tax on the average company car. This incentive completely removes any FBT liability and is a significant saving for those who take the step to a low emission vehicle.
The opportunity is also available for employees wishing to salary sacrifice their next electric car purchase through a novated lease arrangement.
In addition, there is a one-off NSW government rebate of $3,000 available for electric cars or plug in hybrids acquired for less than $68,750.
Electric cars may not be for everyone, but if you are looking to reduce the amount of FBT you pay on your company car, then electric cars are worth considering.
If you would like to discuss this article further, please contact us directly at mail@adviceco.com.au
