What happens when two employees use the same car?
At a recent meeting of the ATO’s FBT sub-committee, the ATO was asked: “What happens when two employees, both using log books, use the same car and get different percentage uses?” Let’s look at an example of how this may work and what is a reasonable solution. Example XYZ Pty Ltd supplied a car to Employee A for the first four months of the 2013 FBT year. During this time, Employee A maintained a valid logbook for a continuous 12 week period. Employee A then left the company and the vehicle was transferred to Employee B, another employee of XYZ Pty Ltd. As Employee B’s job role is substantially different, Employee B also maintained a valid logbook to cover their use of the vehicle for a continuous period of 12 weeks. The employee breakdown and business use percentage as per the logbooks are as follows: Employee Business kms Total kms Business % A 32,040 36,000 89% B 3,480 6,000 58% Based on the above, the business use percentage should be calculated on the total number of business kilometres travelled divided by the total kilometres travelled for the holding period: i.e., 32,040 + 3,480 = 35,520 divided by 42,000 resulting in a business use percentage of 84.57% (assuming this reflects the FBT year). In the future years, the latter log book (with a business percentage of 58%) should be used as a guide for the employer to estimate the total business travel taking into consideration any changes in the employee’s travel patterns (e.g., annual leave, changed job description etc).
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