The mere mention of Fringe Benefit Tax (FBT) is enough to make most business owners wince. So when news came out that the government is seeking feedback on changes to the FBT regime, you might have been tempted to scroll past.
But wait—this consultation is actually worth your attention because it's focused on “simplifying” these notoriously cumbersome rules.
What's Changing?
The consultation period remains open until May 5, 2025, and is aimed at reducing compliance costs for businesses. As a business owner myself, three proposed changes particularly caught my eye:
1. New Motor Vehicle Classifications
The proposal suggests a clearer three-tier classification system:
- Unrestricted private use vehicles – Full private access with corresponding FBT implications
- Mainly business vehicles – Restricted private use (such as home-to-work travel)
- Solely business vehicles – No personal usage permitted except for incidental use
2. Farewell to Tracking Minor Benefits
Currently, businesses must track every small benefit provided to employees—from flowers to gift cards. The proposal suggests either:
- Creating a blanket exemption for minor benefits, or
- Establishing a specific list of benefits excluded from FBT rules
3. Simplified Entertainment Rules
The consultation proposes removing current limitations on entertainment expenses and replacing them with clearer exemptions.
Want to Dive Deeper?
If you'd like to explore the full details of these proposed changes, visit the official consultation page.
Our team will monitor developments closely and provide updates once the consultation period finishes. These changes could streamline your compliance requirements—making this one tax reform actually worth looking forward to.
NB: This article was prepared in April 2025. Tax legislation is subject to change.