Jim McEntee is provided with a company car which he is allowed to use for private purposes. The car was purchased on 1 November 2017 for $40,000. During the year Jim drove the car 30,000 km of which 60% were for business trips.

Costs associated with the vehicle were:

Petrol and oil $1,020

Registration and insurance $1,500

Maintenance $500

Required: 

(a) Calculate the Taxable Value of the benefit for the 2017/18 fringe benefits tax (FBT) year for the vehicle using both the statutory formula method and the operating cost method. (Show your workings for each method).

(b) Based on your calculations, state which method is the most beneficial method for the employer for assessing the FBT liability?

Answer rating: 100% (QA)

Answer a The statutory formula method provides the taxable value of the benefit to Jim ... View the full answer