Latest news with #FBT
Scoop
18 hours ago
- Business
- Scoop
PM's Intervention To Kill Simon Watts' Ute Tax 2.0 Welcomed By Taxpayers
The Taxpayers' Union is welcoming the Prime Minister's intervention to rule out the Inland Revenue Department's proposal to apply Fringe Benefit Tax (FBT) to all utes worth $80,000 or more and other work vehicles — a plan directed by Climate Change and Revenue Minister Simon Watts. In response to media comment issued by the Prime Minister's Office last night, Taxpayers' Union Executive Director Jordan Williams said: 'Simon Watts was pushing a new Ute Tax, without his Cabinet colleagues or the public even knowing. Had it gone ahead, farmers and tradies would have been slammed with thousands of dollars in additional tax each year – not just once like Labour's Ute Tax, but every year.' 'The documents are crystal clear. IRD was instructed by Minister Watts to proceed with and consult with the tax industry on the implementation of a new FBT regime that would capture work vehicles, regardless of how they're actually used. This was a massive tax hike by stealth.' "As far as we can tell, the Revenue Minister didn't consult with any taxpayer, business, or farming groups, despite work having been done on this for nearly a year. Had he bothered to engage, the unfairness and political risk would have been obvious. That lapse saw the Government facing backlash because it was tax boffins who blew the whistle and it took everyone by surprise. Minister Watts should learn the lesson." 'Within hours of our campaign launch yesterday, the National Party was in damage control. Within six hours, the PM's team overruled Watts and confirmed the policy would not proceed.' The Taxpayers' Union yesterday revealed documents showing that IRD had been working on changes to remove the logbook exemption for work vehicles and impose FBT on the assumed private use of double cab utes. According to IRD's own estimates, the tax grab would have cost farmers, tradies and other ute owners $100 million per year. 'We give credit to the Prime Minister and his office for stepping in quickly and pulling the handbreak.' says Mr Williams. 'This is a clear win for taxpayers and proof that grassroots pressure works. We thank the thousands of Kiwis who used our online tool to email National MPs and demand the Ute Tax 2.0 be scrapped."
NZ Herald
3 days ago
- Automotive
- NZ Herald
Ute buyers face Investment Boost carrot, Fringe Benefit Tax stick
The Government's new Investment Boost scheme has provided an incentive for businesses to buy a dual-cab ute, just as a new wave of plug-in hybrid models are tempting buyers. But some fear possible changes to the Fringe Benefit Tax (FBT) rules will undercut the gains. Announced in the May Budget,
1News
3 days ago
- Automotive
- 1News
IRD warns about misunderstanding fringe benefit tax
Inland Revenue says it wants to clear up misunderstanding about the effect of proposed changes to fringe benefit tax (FBT), particularly when it comes to double cab utes. There was a warning this week that farmers buying expensive utes at Fieldays could be in for a shock if the FBT rules changed in line with proposals released earlier this year. Federated Farmers has also warned of a "ute tax 2.0". But Inland Revenue deputy commissioner, policy, David Carrigan, said there were misunderstandings about the tax, including a myth that utes had been FBT-free. "When it comes to double cab utes, these are treated no differently to any other vehicle. Unless the use of the vehicle meets all the requirements for an exemption from FBT, then a double cab ute is, and always has been, subject to FBT. That is the current law," Carrigan said. ADVERTISEMENT "Work-related vehicles are only exempt from FBT if they meet certain requirements. This includes double cab utes." The morning's headlines in 90 seconds, including Auckland's supermarket fire, Trump's threat to Iran, and how a smart watch could make you fitter. (Source: 1News) At the moment, work vehicles such as utes are only exempt from FBT on days when they are used for essential work purposes. He said what was proposed was not a change to that treatment, but to remove the necessity to count days when a vehicle was or was not available for private use. "The idea is to simplify FBT, not create additional obligations. If a business - including a farm - is not currently liable for FBT on a vehicle, then it's unlikely they would become liable for FBT under any proposals taken forward." He said the aim of the FBT proposals was not to increase revenue but to reduce compliance costs of FBT. "The government has not made any final decisions in relation to potential changes to the FBT regime and Ministers are currently considering the feedback received from submitters on the Inland Revenue issues paper with a view to refining those proposals." ADVERTISEMENT Deloitte tax partner Robyn Walker agreed there was "fake news" circulating about the FBT rules. She said there had historically been concerns about low levels of compliance with FBT. "This review essentially concluded that a lack of compliance with the existing laws (and lack of compliance by Inland Revenue) had the potential to erode the integrity of the tax system. "Essentially, if taxpayers think it is okay to not comply with FBT rules, they'll also start not complying with other tax laws." She said the idea that utes were completely exempt from FBT was long-standing but had never been the case. But under the proposals released earlier this year, a vehicle used for work purposes and generally only available for home to work travel and travelling to different worksites would be "category three" vehicle with a 0% rate for FBT purposes. "Under the proposals, if there was occasional additional private use of the vehicle, this would be ignored." ADVERTISEMENT She said the changes also opened this category up to other vehicles such as small cars and electric vehicles. "There is a proposed rule that vehicles assigned to shareholder employees would not be able to be exempted from FBT if the vehicle has a cost of $80,000-plus. "However, for FBT purposes, you only look at the cost of the vehicle and you ignore any 'business accessories'. "There is a false narrative that if a ute is purchased and it is fitted with work-related gadgets that increase the total cost to above $80,000 that the vehicle is automatically subject to full FBT. This is incorrect."
Otago Daily Times
4 days ago
- Automotive
- Otago Daily Times
IRD warns about misunderstanding fringe benefit tax
By Susan Edmunds of RNZ Inland Revenue says it wants to clear up misunderstanding about the effect of proposed changes to fringe benefit tax (FBT), particularly when it comes to double cab utes. There was a warning this week that farmers buying expensive utes at Fieldays could be in for a shock if the FBT rules changed in line with proposals released earlier this year. Federated Farmers has also warned of a "ute tax 2.0". But Inland Revenue deputy commissioner, policy, David Carrigan, said there were misunderstandings about the tax - including a myth that utes had been FBT-free. "When it comes to double cab utes, these are treated no differently to any other vehicle. Unless the use of the vehicle meets all the requirements for an exemption from FBT, then a double cab ute is, and always has been, subject to FBT. That is the current law," Carrigan said. "Work-related vehicles are only exempt from FBT if they meet certain requirements. This includes double cab utes." At the moment, work vehicles such as utes are only exempt from FBT on days when they are used for essential work purposes. He said what was proposed was not a change to that treatment, but to remove the necessity to count days when a vehicle was or was not available for private use. "The idea is to simplify FBT, not create additional obligations. If a business - including a farm - is not currently liable for FBT on a vehicle then it's unlikely they would become liable for FBT under any proposals taken forward." He said the aim of the FBT proposals was not to increase revenue but to reduce compliance costs of FBT. "The government has not made any final decisions in relation to potential changes to the FBT regime and Ministers are currently considering the feedback received from submitters on the Inland Revenue issues paper with a view to refining those proposals." Deloitte tax partner Robyn Walker agreed there was "fake news" circulating about the FBT rules. She said there had historically been concerns about low levels of compliance with FBT. "This review essentially concluded that a lack of compliance with the existing laws (and lack of compliance by Inland Revenue) had the potential to erode the integrity of the tax system. "Essentially, if taxpayers think it is okay to not comply with FBT rules, they'll also start not complying with other tax laws." She said the idea that utes were completely exempt from FBT was long-standing but had never been the case. But under the proposals released earlier this year, a vehicle used for work purposes and generally only available for home to work travel and travelling to different worksites would be "category three" vehicle with a zero percent rate for FBT purposes. "Under the proposals, if there was occasional additional private use of the vehicle, this would be ignored." She said the changes also opened this category up to other vehicles such as small cars and electric vehicles. "There is a proposed rule that vehicles assigned to shareholder employees would not be able to be exempted from FBT if the vehicle has a cost of $80,000-plus. "However, for FBT purposes, you only look at the cost of the vehicle and you ignore any 'business accessories'. "There is a false narrative that if a ute is purchased and it is fitted with work-related gadgets that increase the total cost to above $80,000 that the vehicle is automatically subject to full FBT. This is incorrect."
RNZ News
4 days ago
- Automotive
- RNZ News
IRD warns about misunderstanding fringe benefit tax
At the moment, work vehicles such as utes are only exempt from FBT on days when they are used for essential work purposes. Photo: Screenshot / Unsplash / RNZ Inland Revenue says it wants to clear up misunderstanding about the effect of proposed changes to fringe benefit tax (FBT), particularly when it comes to double cab utes. There was a warning this week that farmers buying expensive utes at Fieldays could be in for a shock if the FBT rules changed in line with proposals released earlier this year. But Inland Revenue deputy commissioner, policy, David Carrigan, said there were misunderstandings about the tax - including a myth that utes had been FBT-free. "When it comes to double cab utes, these are treated no differently to any other vehicle. Unless the use of the vehicle meets all the requirements for an exemption from FBT, then a double cab ute is, and always has been, subject to FBT. That is the current law," Carrigan said. "Work-related vehicles are only exempt from FBT if they meet certain requirements. This includes double cab utes." At the moment, work vehicles such as utes are only exempt from FBT on days when they are used for essential work purposes. He said what was proposed was not a change to that treatment, but to remove the necessity to count days when a vehicle was or was not available for private use. "The idea is to simplify FBT, not create additional obligations. If a business - including a farm - is not currently liable for FBT on a vehicle then it's unlikely they would become liable for FBT under any proposals taken forward." He said the aim of the FBT proposals was not to increase revenue but to reduce compliance costs of FBT. "The government has not made any final decisions in relation to potential changes to the FBT regime and Ministers are currently considering the feedback received from submitters on the Inland Revenue issues paper with a view to refining those proposals." Deloitte tax partner Robyn Walker. Photo: Supplied / Deloitte Deloitte tax partner Robyn Walker agreed there was "fake news" circulating about the FBT rules. She said there had historically been concerns about low levels of compliance with FBT. "This review essentially concluded that a lack of compliance with the existing laws (and lack of compliance by Inland Revenue) had the potential to erode the integrity of the tax system. "Essentially, if taxpayers think it is okay to not comply with FBT rules, they'll also start not complying with other tax laws." She said the idea that utes were completely exempt from FBT was long-standing but had never been the case. But under the proposals released earlier this year, a vehicle used for work purposes and generally only available for home to work travel and travelling to different worksites would be "category three" vehicle with a zero percent rate for FBT purposes. "Under the proposals, if there was occasional additional private use of the vehicle, this would be ignored." She said the changes also opened this category up to other vehicles such as small cars and electric vehicles. "There is a proposed rule that vehicles assigned to shareholder employees would not be able to be exempted from FBT if the vehicle has a cost of $80,000-plus. "However, for FBT purposes, you only look at the cost of the vehicle and you ignore any 'business accessories'. "There is a false narrative that if a ute is purchased and it is fitted with work-related gadgets that increase the total cost to above $80,000 that the vehicle is automatically subject to full FBT. This is incorrect." Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
