Generally, a fringe benefit arises where a business or employer makes a vehicle available to an employee for private use.  However, it may be an exempt benefit if the employer limits the use to work-related travel and private use that is 'minor, infrequent and irregular'.

The Tax Office says its experience shows inconsistent methods are used by FBT taxpayers and 'to reduce compliance costs' a draft Guideline explains what it regards as private use for purpose of the car-related exemptions.  This applies to vehicle benefits provided from April 2017 to 31 March 2018.

This is usually an ongoing problem for fleet vehicles, that is, when is a private benefit provided?  The Guideline particularly relates to commercial vehicles, like Utes or vehicles carrying less than 1 tonne because the common salesman myth is that 'all utes are FBT free'.

The draft Guideline can be relied on each year if you are claiming that private use of the vehicle (car, ute, etc) was in these circumstances:

- a car/ute/less than 1 tonne vehicle was provided to an employee to perform his work duties

- the employer takes reasonable steps to limit private use of the vehicle and has measures in place to monitor such use (a daily log book or diary, odometer reading on 30 June every year and compare to expected home to work travel)

- the vehicle has no non-business accessories fitted

- the GST-inclusive value at acquisition date is under $57,581 (luxury car limit)

- the employer only uses the vehicle to travel between home and work and any diversion adds no more than 2km to the usual length of that trip

- no more than 750km for each FBT year for all private usage

- no single journey for a wholly private purpose exceeds 200km

What this means is that a log book, required to be kept for 12 weeks in the first year still needs to be kept, and may be suitable to calculate a claim for business and private use.  Additionally, it will also be necessary where it is claimed that any private use is "minor or infrequent" (where the vehicle is a ute or a commercial vehicle carrying less than 1 tonne) that there are records kept throughout the year of private use, as set out in the Guideline.

I am not sure how you can keep these records for the last year when the Guideline was only issued this month, but will be retrospective to 1 April 2017.  Perhaps this is a case-by-case matter – call me if you're out of ideas.