ATO cracks down on utes after helping make Hilux a best seller

[Express]

ATO cracks down on utes after helping make Hilux a best seller

9 February, 2016

Jared Lynch
Business reporter




Unlike regular cars, utes are exempt from fringe benefit tax for minor private use. Photo: Joshua Dowling


There's a rumour swirling from the Australian Taxation Office that its employees like to go to weekend footy – not to watch the game but the cars parking outside the ground.

Utes have soared in popularity in the past decade. In mid-2009 the Toyota Hilux went past the Holden Commodore to become the nation's best-selling vehicle and has been in the top-selling list ever since.

Meanwhile, the Commodore has slipped to No. 15 and its rival Ford Falcon, which was fifth-best-selling car when Hilux claimed No. 1 spot, has disappeared from the list altogether and will cease production from October 2016.



There is a rumour that the Australian Taxation Office goes to the football at the weekend and checks the number plates of all the utes. Photo: Paul Rovere


Unlike regular cars – and this is where the taxman comes in and the talk of their watchful eyes at the football – utes are exempt from fringe benefit tax for minor private use, including travelling to and from work and irregular use such as dumping domestic rubbish at the tip.

Combine that with utes becoming more SUV-like and there is more bang for buck from a taxation perspective, compared with a Falcon or Commodore, which will cease production from 2017.

But there's a catch. Elizabeth Lucas, a partner at accounting firm Grant Thornton, said if a ute was found to be used heavily for private use the Tax Office could charge fringe benefit tax and other penalties.



The Toyota Hilux was the fourth-best-selling vehicle in Australia in the latest figures. Photo: Supplied


"There is a rumour that the ATO goes to the footy at the weekend and checks the number plates of all the utes because it is a giveaway that they are being used for private use," Ms Lucas said.

An ATO spokesman said the office was focusing on "unusually high work-related expense claims, including work travel across all industries and occupations", and was using a "much wider approach than in previous years".

But the spokesman said "tax officers do not attend football matches for the purposes of compliance activity".



The Toyota Hilux SR5 interior is far removed from the utes of old.


"We use contemporary techniques using sophisticated analytics and data to scrutinise all claims," he said.

"The ATO's ability to identify and investigate claims that differ from the norm is increasing at a rapid rate due to improvements in technology and the use of data."

Ms Lucas said such methods that had proved successful included cross-checking vehicles with VicRoads' registration data base.

She encouraged her clients to get their employees to fill out declarations, "or if they're really worried have the employees' fill out log books".

The latest sales figures from the Federal Chamber of Automotive Industries show the Ford Ranger was Australia's third-best-selling vehicle, behind the Mazda 3 and Toyota Corolla.

The Toyota Hilux was the fourth-best-selling vehicle, while Nissan Navara rounded off the top 10. Mitsubishi Triton was ranked 17th.

And the popularity of workhorse vehicles isn't a phenomenon confined to Australia. In the United States, opulently optioned pick-up trucks have become the nation's top-selling luxury cars, Forbes says.

http://www.smh.com.au/business/ato-c...09-gmpevq.html

[Polyal]

What local 5 seat ute would be protected? Agricultural they are but they are bloody handy.

I wish someone made a 6 seater with a tray, say bye bye to any people mover.

[Wretched]

Originally Posted by tempted

About bloody time. The way the tax system supports the sales of these imported tractors is ludicrous. It's a pity it wasn’t done years ago, maybe local cars would have had a better chance of survival.

Which specific car?
Falcon?
Commodore?
Territory?
Camry?
Cruze?

[csv8]

How does this affect a private buyer of one of these utes??? If the fringe benefits tax was applied, how much would they go up for a non tradie/farmer????

[mike_nofx]

Originally Posted by Polyal

I wish someone made a 6 seater with a tray, say bye bye to any people mover.

I don't know about that. Really it depends what people are carrying around that requires the use of a ute Vs a people mover or SUV.
Sure ute's may be handy for carrying bikes for example, but even then they don't fit comfortably on a dual cab tray, or loads of soil etc, but for 95% of other cases a wagon is handier for things like camping gear, prams, luggage, groceries or basically anything you want kept out of the weather or secure.

Thats of course referring to average home users, not tradesmen, as the tradesmen would never have bought the people mover anyway.

[Polyal]

Id take a 6 seater dual cab ute thing over a Territory, my C4, or any other SUV 7 seater. It would be gold.

My C4 Picasso has a column shift, just no bench seat :( (but it seats 7 anyway). Im a glamper, I just want somethign that I can fit 4 kids in and throw some bikes/camping gear in the back for a weekend.

Any longer and I am in a hotel.

[blueoval]

Big Brother is watching and will squeeze out every last cent from your wallet. Someone needs to pay for all the ex-prime minsters retirement funds for life.

[boss351290]

Except Harold Holt, or is he still classified as alive from a taxation point of view??

[Windsor220]

Most people I know that drive dual cabs bought them because they wanted them. Not for any tax benefit.

[Kieron]

Originally Posted by tempted

Who said anything about a local 5 seater ute?

Whilst some utes are bought and used for genuine business purposes, a large proportion of them are bought for no other reason than the tax benefits. The tray is never even touched and the vehicle is used as a regular car.

Can you point me to the stats that supports what your saying?

If such tax benefits weren't offered, people would have bought regular cars instead which would have helped our local industry.
All the ATO has done with their flawed policies is give a free kick to the Thai car industry.

The local car industry would have gone regardless.

[simon varley]

Originally Posted by tempted

If such tax benefits weren't offered, people would have bought regular cars instead which would have helped our local industry.

No. Not in a million years. They are completely different beasts.

[Top_Ghia]

That article was absolutely terrible.
Josh says
"Tax office is spying on you at the footy"
ATO says "no, we don't do that".

Give that man an award for hard hitting journalism. He must be trying to get a gig at a current affair. What a knob.

[Davehoos]

My employer traded FG falcon XR6 and R6 ute for 4X4 crew cab ranger and D-max for tax/lease dollar reasons. XR6 became a luxury item and not available for government purchase and LPG cars became too expencive. The need is for a 2 seat vehicle that can travel at least 10 000Km a year and up to 200Km a day. be a stupid fleet operator that purchased vehicles that was uneconomical or had high resale/profit value.

10 years ago tax man set up at boat ramps and checked on vehicle use and made a lot of dollars. yes the article was rubbish but it was printed for a reason.

[Charliewool]

Originally Posted by Top_Ghia

That article was absolutely terrible.
Josh says
"Tax office is spying on you at the footy"
ATO says "no, we don't do that".

Give that man an award for hard hitting journalism. He must be trying to get a gig at a current affair. What a knob.

That football rego checking story does the rounds every 3 or 4 years!
My accountant related the same story at least 15 years ago!

FBT has always applied unless the vehicle is strictly for work purposes.. Nothing new.
More likely they'll close the GST & LCT saving on commercial vehicles (utes)

[4vxc]

Originally Posted by tempted

Who said anything about a local 5 seater ute?

Whilst some utes are bought and used for genuine business purposes, a large proportion of them are bought for no other reason than the tax benefits. The tray is never even touched and the vehicle is used as a regular car.
If such tax benefits weren't offered, people would have bought regular cars instead which would have helped our local industry.
All the ATO has done with their flawed policies is give a free kick to the Thai car industry.

there is some truth in this, look at the mum's driving the dual cabs around.
They don't look like tradies to me

[Franco Cozzo]

Originally Posted by 4vxc

there is some truth in this, look at the mum's driving the dual cabs around.
They don't look like tradies to me

Sexism!

[vztrt]

I'd remove the FBT exemtion and run a log book. The way the system is now actually hinders someone who can do 10,000 genuine business k's a year but doesn't do the km's 12 weeks in a row.

[superyob]

Originally Posted by Polyal

What local 5 seat ute would be protected? Agricultural they are but they are bloody handy.

I wish someone made a 6 seater with a tray, say bye bye to any people mover.

Holden Crewcab? I think that's what it was called...

Was the tax benefit applied to the dual cab utes when these were in production???

[GO FURTHER]

Originally Posted by csv8

How does this affect a private buyer of one of these utes??? If the fringe benefits tax was applied, how much would they go up for a non tradie/farmer????

They would not go up.... FBT does not effect the price of a vehicle.
FBT is a tax paid by companies on the private use of a company supplied vehicle to an employee. But one tonne commercial vehicles / dual cabs / utes are exempt.
For example .... If your company supplies you a Falcon as a company car, they will pay FBT on your behalf for the private use. This has not effected the price we pay for Falcons.

[superyob]

Is it not reasonable to assume that if tax breaks were not handed out for imported cars, our local utes may have sold in larger volume, thus helping to keep local manufacture alive???

[simon varley]

sadly, even if the local products sold in the volumes they did at their best, it would still not be viable to keep producing them.

[mike_nofx]

Originally Posted by Polyal

Id take a 6 seater dual cab ute thing over a Territory, my C4, or any other SUV 7 seater. It would be gold.

My C4 Picasso has a column shift, just no bench seat :( (but it seats 7 anyway). Im a glamper, I just want somethign that I can fit 4 kids in and throw some bikes/camping gear in the back for a weekend.

Any longer and I am in a hotel.

I'm not going to argue with which vehicle you'd prefer or how you use it, but I am just curious here. For you specifically, how would the tray rear benefit you more over a wagon rear?

I do ask with genuine interest as utes do seem more common now as a family vehicle, but I honestly don't see the benefits for most people, and actually can think of many cons with owning one. Maybe you can enlighten me.

[GasoLane]

Stay on Topic

[RANGEREST]

Originally Posted by mike_nofx

I'm not going to argue with which vehicle you'd prefer or how you use it, but I am just curious here. For you specifically, how would the tray rear benefit you more over a wagon rear?

I do ask with genuine interest as utes do seem more common now as a family vehicle, but I honestly don't see the benefits for most people, and actually can think of many cons with owning one. Maybe you can enlighten me.

My thoughts on this are, camping gear, bikes when towing the van, boat fuel, fridges and tip runs save me having a trailer, by having a ute that will carry my family in reasonable comfort
Most of the stuff mentioned above I wouldn't want to put in the wagon, some people couldn't care about fuel mud etc in a wagon though.

[mik]

It wouldn't surprise me if ato was spying on people , the resources are there to track most peoples everyday comings and goings , big brother is watching !

[Giant Cranium]

Originally Posted by mik

It wouldn't surprise me if ato was spying on people , the resources are there to track most peoples everyday comings and goings , big brother is watching !

i don't think they are too worried about mum and dad, the cost to retrieve would cost more than they would get back. they target companies, a lot more cream doing that

[Carrion]

I only use it for work, honest.

[mik]

i dunno Giant Cranium , they look to be on the hunt for revenue , i would not put anything past them.

[castellan]

Originally Posted by Windsor220

Most people I know that drive dual cabs bought them because they wanted them. Not for any tax benefit.

Most people I know have them dual cabs only because they have to have one for the kids or other workers at times, but can not afford 2 cars, so they have to put up with such rubbish that has only a small back and get a trailer as well if they need more space for work gear, also the tax benefit makes them go that way as well.

Such dual cab are a pain but many just have to put up with it, they really are just junk, have you ever sat in the back of one, they are hell if you are over 6ft or you want your backbone smashed to bits.
I would not ever get into the back of one if I was payed too.

[naddis01]

Originally Posted by castellan

Such dual cab are a pain but many just have to put up with it, they really are just junk, have you ever sat in the back of one, they are hell if you are over 6ft or you want your backbone smashed to bits.
I would not ever get into the back of one if I was payed too.

Not so with the current generation of dual cabs like the Ranger.