You are the junior accountant at CBW Bank. You have been asked to assist with the 30 June 2021 tax work:

As part of the bank manager's contract she was provided with a BMW luxury motor vehicle for her work travel. The contract for the provision of the car was entered into on 1 January 2020.

The bank manager is permitted to take the car home at the end of the day and there is no restriction on her use of the car for non-work purposes.

The car was originally acquired by the bank on 1 January 2019 utilising a loan at a rate of 10% per year. For tax purposes the car can be written off over 4 years. The cost of the car was $90,000.

Other details regarding the car are as follows:

Petrol and oil                                       $6,000

Registration                                         $2,000

Insurance                                             $1,800

Repairs and Maintenance                  $1,000

Speeding fine                                      $600

The manager is required to contribute $100 per month. The car travelled 50,000 km for the year FBT year. Of these, 30,000 km related to business travel.

Required:

Calculate FBT liability for the car. Show all workings.

 

Answer rating: 100% (QA)

Here are the workings to calculate the FBT liability for the car provided to the bank manager ... View the full answer