Now for a boring little piece on tax… but bear with me. It will reveal the pettiness of this government, and how they really, really do despise farmers, tradies and almost anyone who actually works for a living.
The Fringe Benefit Tax (FBT) rules have 2 types of private vehicles: work-related vehicles and everything else. “Everything else” covers vehicles designed primarily for the carriage of passengers. “Work-related” vehicles include vans, utes and station wagons with the back seats either taken out or permanently affixed down – so vehicles designed primarily for the carriage of goods, tools and the like. Both types of vehicles attract FBT, but work-related vehicles may be driven to and from work without FBT being payable. If a ute is used privately, however, it still attracts FBT, but the exemption is very useful and can reduce the liability for FBT on a vehicle – in fact, it can, with careful observation of the rules, eliminate it all together.
Enter the double-cab ute. We took advice from IRD when these were first introduced, and were told that, as the principal purpose of a ute is still to carry goods, tools and the like, they would still be considered as work-related vehicles… and so it has been for the last 20 years or so.
Until now.
Documents released under the Official Information Act show Parker has received advice on how double-cab utes were taxed and Parker confirmed he was considering acting on it.
Parker said the advice from IRD was that double-cab ute owners weren’t exempt from paying FBT, despite a popular belief that there was an exemption in place. Instead, IRD thinks the existing rules aren’t being properly enforced.
This is a technicality, but, as I said, we took advice years ago and were advised that double-cab utes were still classed as work-related vehicles, because the primary purpose was not the carriage of passengers.
Parker said IRD was not keen on chasing down the double-cab ute owners’ taxes because it would not bring in much money.
If the IRD are not interested, Parker should leave it alone. There are other ways of avoiding FBT that could apply to double-cab utes so this really will bring in very little revenue.
But it’s not about revenue for this government, is it?
However, he pointed to the Government’s climate-change policies and the “proliferation” of the utes as a reason for a clampdown.
NZ Herald
People who own utes privately do not pay FBT. A business person driving a double-cab ute and using it mainly for the carriage of passengers is technically caught by the FBT rules anyway. The exemption doesn’t apply unless the vehicle is being used primarily for the carriage of goods or equipment in the course of business.
Many farmers and tradespeople have double-cab utes. In fact, they are almost universal these days. So, while there may be some people who choose to drive a ute even though they don’t need one for work purposes, this will penalise legitimate business people who need a ute for work purposes but have double-cab utes because those back seats can be useful for the transportation of supplies or tools as well.
What a petty, spiteful government this is. But make no mistake. This is another attack on farmers and tradespeople – the very ones that the ‘work-related vehicle’ exemption was designed to protect.
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