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Changes to FBT statutory fraction rates

As of 10 May 2011 a standard 20% rate will be applied to all new car fringe benefits provided to employees which are valued under the statutory formula method.

This change will result in the following:

• Increased tax effectiveness for employees travelling less than 15,000km per year
• No change for employees travelling between 15,000km and 25,000km per year
• Decreased tax effectiveness for employees travelling in excess of 25,000km per year.

In light of these changes it may be time to reconsider the method under which you value your car fringe benefits and, in particular, whether the log book method may now be more tax effective for your circumstances. 

The material and contents provided in this notification are informative in nature only.  It is not intended to be advice and you should not act specifically on the basis of this information alone.  If expert assistance is required, professional advice should be obtained by calling Collins Hume on 02 6686 3000.