On Wed 19.10.2016 the Commissioner issued Practical Compliance Guideline PCG 2016/10 (Fleet Cars: simplified approach for calculating car fringe benefits).

The PCG outlines a simplified approach for calculating car fringe benefits that is expected to reduce the record-keeping burden on employers with large fleets by allowing them to rely on a representative average business use percentage to calculate car fringe benefits for the fleet under the operating cost method.

The PCG applies if the taxpayer meets the following criteria:

  • the taxpayer is an employer with a fleet of 20 or more cars;
  • the cars are “tool of trade” cars;
  • the employees are mandated to maintain log books in a log book year;
  • the taxpayer holds valid log books for at least 75% of the cars in the log book year;
  • the cars are of a make and model chosen by the employer, rather than the employee;
  • each car in the fleet had a GST inclusive value less than the luxury car limit applicable at the time the car was acquired; and
  • the cars are not provided as part of an employee’s remuneration package (eg under a salary packaging arrangement), and employees cannot elect to receive additional remuneration in lieu of the use of the cars.

DATE OF EFFECT: An employer meeting the above criteria can choose to apply the PCG to the calculation of the taxable value of car fringe benefits in the 2017 FBT year and later years.

[ATO website – PCG 2016/10] [LTN 202, 1/10/16]