FBT Fringe Benefits Tax Electronic Logbooks

Employers may be providing a car fringe benefit if they make available a car they own or lease to an employee for their private use.
For fringe benefits tax (FBT) purposes, a car is any of the following:

• A sedan or station wagon
• Any other goods-carrying vehicle with a carrying capacity of less than one tonne, such as a panel van or utility (including four-wheel drive vehicles)
• Any other passenger-carrying vehicle designed to carry fewer than nine passengers.

Private Use

A car is taken to be available for the private use of an employee on any day they or their associates use it, or are allowed to use it, for private purposes.
If a car is garaged at or near the employees home, even if only for security reasons, it is taken to be available for their private use regardless of whether or not they have permission to use the car privately. Similarly, where the place of employment and residence are the same, the car is taken to be available for the private use of the employee.
Generally, travel to and from work is private use of a vehicle.

Exempt car benefits

Exempt car benefits

There are some circumstances where use of a car is exempt from FBT. For example, an employee’s private use of a taxi, panel van or utility designed to carry less than one tonne is exempt from FBT if its private use is limited to:

• Travel between home and work
• Incidental travel in the course of performing employment-related travel
• Non-work-related use that is minor, infrequent and irregular (such as occasional use of the vehicle to remove domestic rubbish).

You can calculate the taxable value of a car fringe benefit using either of the following methods:

Statutory formula method -

A single statutory rate of 20 percent of the cars base value which applies regardless of kilometres travelled.

Operating cost method

The taxable value of the car fringe benefit is a percentage of the total costs of operating the car during the fringe benefits tax (FBT) year. The percentage varies with the extent of actual private use. The lower the incidence of actual private use, the lower the taxable value.

The simplest method to make FBT reporting on company vehicles easier to manage ,is not to provide your employees with company vehicles, but allow employees to use their own vehicles and claim travel related expenses. These travel related expenses are generally claimed at a rate per kilometer travelled for business purposes. This method is generally not economical for organisations, especially where employees require frequent use of vehicles to perform their duties. Example: Sales and Service staff.

Some organisations provide general use pool cars, where staff come to the office each day using their own method of transport and use a company pool car during the course of the day to conduct their activities. Once again, this may not be the optimum solution for sales and service staff, as additional productivity may be gained each day by starting and finishing work from home rather than travelling to and from the office each day.

Another method to reduce the FBT administrative reporting burden, is for organisations to elect to use the statuatory method and pay the FBT on 20 percent of the purchase value of the motor vehicle. However this method may not be the optimum in minimising FBT obligations.

Therefore the optimim method may be the 'logbook method' which determines the amount of tax payable based on the percentage of private use of the motor vehicle. However this requires administrative burden on field staff, admin staff and the organisation in general.

As a result may companies are turning to GPS tracking devices, apps and other forms of telematics to keep track of business and private use of motor vehicles to substantiate their claims for FBT.

There are many apps and GPS Tracking systems available on the market claiming to be the perfect FBT Electronic Logbook Solution, but most are simple journey recording devices and still require substantial effort and administraion in preparing FBT substantiation documentation.

These range from simple apps which will ask drivers to record the start and end and purposes of their journeys. The app then calculates the distance travelled using GPS.
Some of these apps are a little more advanced and have the ability to record the Make, Model, Year, Number Plate of the vehicle along with the starting odometer value.

In essence these apps are great, but experience tells us that drivers will quickly forget to enter the trip details for each journey. At other times the employee may be ride sharing or on public transport and the app will assume they are driving a company vehicle. As you can see it gets very messy and inaccurate very easily

There are many plug and play cigarette lighter type GPS tracking devices purporting to be FBT logbooks. These too have similar issues, as they are not matched with drivers or vehicles and can be easily unplugged from the cigarette lighter socket causing inaccurate data. These devices do not work well in pool cars or vehicles driven by multiple staff. In addition FBT legislation requires a business trip to be recorded with the purpose of the business trip as a description. Basic GPS Tracking trip recorders are unable to do this.

The optimum FBT Electronic Logbook Solution should provide the following functionality :

• A GPS Tracking Device accurately recording:
•      Odometer at the start and finish of each trip
•      Date & Time at the start and finish of each trip
•      Location at the start and finish of each trip
•      Distance travelled with each trip
• A method for recording who is driving the vehicle. Generally a Driver RFID Wave & Go card or keyring is the most convenient. The GPS Tracking device should sound a buzzer or prevent the vehicle from starting until a Driver ID is presented to ensure driver data is always captured for each trip.
• A method for recording the purpose of the trip. For example Private use or Business use, and if Business use is selected, a method for entering the purpose of the business use trip. This is generally achieved using a terminal, app or keyboard which is interfaced to the GPS Telematics/Tracking Device.
• A method allowing drivers to enter trip purpose "post trip", to correct trip purpose "post trip" or to change trip purpose during a trip.

The solution should also record the office locations of the organisation and determine in the FBT reporting "Days available for private use" based on the vehicle being garaged or stored overnight (or outside working hours) away from any office location.

It is always important to ensure that the chosen solution has a tax office class ruling and data is accepted by the tax office when substantiating claims for FBT.

GPS trackers, (also referred to as Telematics Devices, AVL - Automatic Vehicle Locators, IVMS - In vehicle Monitoring Systems, IVDR - In Vehicle Data Recorders)
are devices that are fitted to the vehicles in your fleet. They receive signals from GPS Satellites orbiting the earth. The GPS information is stored within the GPS Tracker and immediately sent to an IntelliTrac server in the cloud using wireless internet over the mobile phone 2G/3G or 4G networks.

The GPS data is processed at the server and displayed on your Office PC Internet Browser or Smartphone/Tablet app as:

• Vehicle icons moving along on a map
• Easy to read dashboards of trending data
• Vehicle Movements Activity Reporting

The raw GPS data received by the server can be processed and analysed to provide many value added features such as:

• Alerts on any defined events such as leaving an area after hours
• Reminders on when services are due to Road Tax, Insurances, Regos, CTP, RUC etc need payment
• Analysis of Driving Behaviour
• Other Compliance related reporting such as electronic logbooks

The first thing you should consider when buying a GPS Fleet Management Solution for your company vehicles is the reputation of the company.
With so many companies out there supplying GPS Tracking Systems masked as GPS Fleet Management Systems, or very basic Fleet Management Systems without any telemetry data, it is important you do your due diligence to ensure the software you are evaluating, provides all the necessary functionality without making traditional assumptions which are not reliant on GPS Telematics Data.
A true GPS Fleet Management System should also manage the complete lifecycle of your company vehicles from acquisition to disposal and provide accurate reporting and reminders based on accurate GPS Telematics Data and ultimately provide fleet managers with a total cost of ownership of each make and model of vehicle in their fleet based on per km travelled or per hour used.

With so many products and software combinations, it is difficult to provide indicative costs, however there are a few factors to consider when purchasing a GPS Fleet Management Solution for your business.
Most providers will use the following pricing models:

• Buy GPS Tracker Out right without any contract, pay for a packaged sim card data, fleet management software & mapping licencing fee annually in advance.
• Buy GPS Tracker at a reduced subsidised price on a minimum 3 year contract, pay for a packaged sim card data, fleet management software & mapping licencing fee monthly in advance.
• Lease or Rent a GPS Tracker on a minimum 3 year leasing or rental contract which includes sim card data, fleet management software & mapping licencing fee monthly in advance.

Reputable GPS Fleet Management providers like IntelliTrac, are required to pay companies like Google Maps for commercial licences, and for more complex solutions we are also required to pay other mapping companies for the provision of speed limit data and other map data which is taken for granted these days.
In addition your annual or monthly subscription will also include:

• Provision of the sim card in your GPS Trackers as well as the data costs for transmission of data from the tracker to our servers
• A cost for running a cloud service to host the GPS tracking software whether it be with a reputable cloud provider such as Microsoft, Amazon or Google, of whether it be in proprietary data centres with dedicated or shared servers.
• A cost for providing support and help desk staff to answer your calls, provide training and rectify any issues if and when they occur.
• A cost for on going product development, as browsers, operating systems, mapping interfaces and other features are constantly changing and require updating to keep your service active and working at its best.
• A cost for maintaining a field service crew of technicians and account managers to be at your service as vehicles are sold and devices require removal and refit, or to provide a consultative approach to ensuring you are getting the best from our solutions.

IntelliTrac has the most flexible and Scalable fleet management software in the industry.
That's because unlike other providers focusing in specific industry segments such as small service based businesses, transport or minining, IntelliTrac has world wide experience across all market verticles. Our software can be fine tuned to meet your needs today in a simple easy to use interface and grow with you as your business grows. An online demo is a perfect opportunity to view the flexibility of our software.

The great thing about IntelliTrac is that is provided as Software-as-a-Service (SaaS). That means that there is no need to load any software on your computer and you don't even require any IT technical staff in your business.
All you need is a computer, a mobile phone or tablet that can connect to the internet running an up to date browser like Google Chrome, Firefox, Safari or Microsoft Edge.
You can even use your Android or Apple device to access key information about your fleet vehicles and today’s jobs.

IntelliTrac understands that as your business grows our software needs to be Scalable and adapt.
Our flexible and Scalable software can be massaged by our support staff to be easy to use whilst giving you access to the full range of functions and modules required as your business grows over time. Simply contact your customer services team to discuss your growing requirements at any time.

Just like using your iPhone or Android phone, at IntelliTrac our software engineers work hard to make our software user friendly and intuitive.
Actually most of our clients rarely ask for training, however when you join us we guide you every step of the way with our online one on one training program, and at the same time we customise the look and feel of your system so it does exactly what you want it to do.
We also move out of your favorites those features that you are not likely to use, making our software less cluttered.
Of course we also provide online training manuals and training videos with indexes so you can get to the topic of choice and quickly familiarise yourself.
We also have local support teams who can assist you, either over the phone, via online webinars or via email.
IntelliTrac is powerful software with lots of features which you will use as your business grows, but it’s also designed to be quick and easy to use for anyone.