As the FBT year concludes on 31 March, businesses must stay informed about critical changes and global trade developments. This guide breaks down essential updates on fringe benefits tax, tariffs, and property regulations to help you navigate compliance and planning.

FBT 2025: What You Need to Know

FBT Exemption for Electric Cars

Employers providing eligible electric vehicles (EVs) may qualify for an FBT exemption if:

• The vehicle is zero or low-emission (battery electric, hydrogen fuel cell, or plug-in hybrid).

• The car was first used on or after 1 July 2022.

• Its value is below the luxury car tax threshold for fuel-efficient vehicles ($89,332 for 2024–25).

Key Change:

• Plug-in hybrids lose exemption from 1 April 2025 unless:

  • Exemption applied before 1 April 2025, and

  • A binding financial commitment exists to continue private use post-1 April 2025.

Practical Examples:

• If your business leases a plug-in hybrid under a pre-2025 agreement, exemption continues until the lease ends.

• Charging stations installed at an employee’s home do not qualify for exemption.

Employee Contributions:

• Use the ATO’s 4.2 cents/km shortcut rate to calculate electricity costs for EVs (excludes plug-in hybrids).

• Ensure contributions are documented to reduce taxable value.

Providing Equipment to Work From Home

FBT generally does not apply for work-related items like laptops, monitors, or phones if:

• Used primarily for work (e.g., >50% business use).

• Provided to employees (not contractors).

• Aggregated turnover is under $50 million (up from $10 million in prior years).

Common Exempt Items:

• Portable electronics (tablets, phones).

• Office furniture (chairs, desks).

• Software subscriptions (Microsoft 365, Zoom).

Risk Area:

• If an employee uses a work laptop for personal streaming or gaming, FBT applies to the private use portion.

Does FBT Apply to Contractors?

FBT applies to employees, not genuine contractors. Ensure workers are correctly classified:

• ATO Guidelines: Focus on contractual terms, not day-to-day conduct.

• Consequences of Misclassification: Penalties, back-paid superannuation, and FBT liabilities.

Red Flags for Contractors:

• Set work hours or mandatory uniforms.

• Lack of autonomy in task execution.

Resources:

• ATO Ruling TR 2023/4 clarifies worker classifications.

• PCG 2023/2 outlines low-to-high risk categories.

Reducing FBT Record-Keeping Burdens

From 1 July 2024, businesses can use existing records or simplified methods for:

• Travel diaries (LI 2024/11).

• Living-away-from-home allowances (LI 2024/4).

Pro Tips:

• Use apps like Expensify or Xero to track odometer readings digitally.

• Store receipts in cloud platforms (Google Drive, Dropbox) for easy ATO audits.

Top FBT Risk Areas

Mismatched Entertainment Claims

• Deductions & GST Credits: Only claimable if FBT applies.

• Minor Benefits Exemption: Meals under $300/head may be exempt if infrequent.

Example:

• Using the 50/50 method: 50% of a $600 team lunch is deductible and subject to FBT.

• Using the actual method: Full exemption if only 2 employees attend (cost per head = $300).

Employee Contributions via Journal Entries

Journal entries can reduce taxable value only if:

• Obligation exists under employment agreements.

• Entries are finalized before financial accounts are prepared.

Common Pitfalls:

• Retroactive adjustments post-FBT year.

• Unclear contractual terms for contributions.

Not Lodging FBT Returns

Businesses providing cars, reimbursements, or entertainment must lodge FBT returns.
Exemptions:

• Tools of trade (safety gear, laptops).

• Benefits under $300 (e.g., occasional gift cards).

Penalties: Up to $10,500 for failure to lodge.

Trade Wars & Tariffs: Global Impacts

Who Pays for Tariffs?

Recent US actions include:

• 25% tariffs on steel, aluminum, and select imports from Canada, Mexico, and China.

• China’s retaliation: 15% tariffs on US agriculture, 10% on dairy, pork, and tech exports.

Impact on Australia:

• Mining & Agriculture: Reduced Chinese demand impacts iron ore, coal, and barley exports.

• Supply Chain Delays: Higher costs for electronics and machinery imports.

Ban on Foreign Property Purchases

From 1 April 2025–31 March 2027:

• Foreign investors (including temporary residents) cannot buy established homes.

• Exemptions:

  • Development projects requiring completion within 4 years.

  • Build-to-rent schemes approved by FIRB.

Penalties: Fines up to $313,000 for individuals and $1.565 million for corporations.

Important Disclaimer

This information is general and not intended as financial, tax, or legal advice. Vista Financial does not verify third-party data. Consult a professional before acting.

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Key Takeaways:

• Review EV exemptions and contractor classifications before 1 April 2025.

• Simplify FBT record-keeping with digital tools like Xero or Expensify.

• Monitor global trade shifts to mitigate supply chain risks.

Stay ahead with Vista Financial – your partner in navigating complex regulations. 🌏💼