FBT Year End is Here and the ATO is watching your vehicle records

As we head into FBT year end (31 March), we’re seeing a very clear trend from the ATO: motor vehicles are firmly in the spotlight.

Over the past few months, a number of our clients have received direct ATO correspondence asking about specific vehicles owned or operated by their business. These are not random reviews – the ATO is actively matching data and checking whether the FBT treatment of vehicles stacks up with what’s been reported.

If your business uses vehicles and you’re claiming business use, good record‑keeping is no longer optional.

Odometre Records and Logbooks matter more than ever

For FBT purposes, if you want to claim business use using the actual method, the ATO requires a valid logbook and accurate odometer records.

Because of the increased scrutiny we’re seeing we will only be claiming the actual method for a vehicle where there is a valid logbook on file.

If there is any doubt at all about whether your existing logbook is compliant or up to date, our advice is simple – start a new logbook now and keep it for the next 12 consecutive weeks.

This gives you a defensible position if the ATO asks questions later.

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What makes a logbook ‘ATO compliant’?

A logbook must be kept for a continuous 12‑week period and must be representative of the vehicle’s usage. Once completed, it can generally be used for up to five years, provided usage patterns don’t materially change.

At a minimum, each trip must record:

• The date of the journey
• The odometer reading at the start and end
• The number of kilometres travelled
• Whether the trip was business or private
• The purpose of the trip, including where you went and why

This last one is extremely important and we’ve been hearing that this is one of the largest reasons for the failure of a logbook. The ATO is very clear that vague descriptions are not sufficient.

You must also keep the odometre readings at the end of year as well.

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ATO Hot Spots

Based on recent ATO activity and guidance, these are the areas they are focusing on most closely:

1. Trip descriptions must be detailed

Entries such as “client meeting” or “work” are not enough.

The ATO expects to see:

• Where you started
• Where you went
• Why the trip was undertaken

For example:
✅ “Office in Southport to client meeting at Smith Plumbing, Lawrence Drive Nerang”
❌ “Business meeting”

2. Odometer readings must be maintained

Your logbook needs to tie back to actual odometer readings, not estimates.

The ATO expects:

• Opening and closing odometer readings for each trip
• Year‑end odometer readings
• Consistency between logbook totals and reported kilometres

Missing or inconsistent odometer data is one of the fastest ways to lose a claim.

3. Logbooks must reflect reality

The ATO is increasingly comparing:

• Logbooks
• Fuel and servicing records
• Vehicle ownership details
• Work locations and business activity

If the usage claimed doesn’t align with how the business actually operates, it raises red flags very quickly.

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Going Digital: There’s an app for that …

There’s a number of different apps that can be used to effectively record your vehicle usage.

If paper logbooks feel painful (and let’s be honest, they usually are), a digital logbook can make life much easier.

We’ve seen a number of our clients successfully use Driversnote, which tracks trips via your phone and prompts you to enter the required details, helping ensure nothing is missed.

Driversnote has also published a helpful overview of what an ATO‑compliant logbook needs to include, which you can read here:

👉 https://www.driversnote.com.au/blog/ato-compliant-log-book-template

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Official ATO Guidance

For those who want to read directly from the source, the ATO guidance that we rely on includes the following.

These outline exactly what records must be kept and the standard the ATO applies during reviews, so it’s worth a bookmark if you’d like to know more about why we ask the questions we do.

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FBT Spotlight – Dual Cab Utes

There’s a persistent myth that dual cab utes are automatically exempt from FBT. They’re not. The ATO has been very direct about this, and the NTAA has reinforced it:
dual cabs are only exempt if they meet the eligibility test and the private use is genuinely limited.

This is one of the biggest tripping points we see every year.

1. When Dual Cabs Can Be Exempt

To qualify for the work‑related vehicle exemption, two conditions must BOTH be met:

A. The vehicle must be an eligible vehicle

This means it is designed to:

• carry one tonne or more, or
• carry more than 8 passengers, or
• carry less than one tonne but is not primarily designed to carry passengers (this is where most dual cabs sit).

B. Private use must be “limited” — meaning minor, infrequent and irregular

This is the part most businesses get wrong.

The ATO considers private use to be limited only when it is:

• Minor — small in scale (e.g., a quick stop on the way home)
• Infrequent — not happening regularly
• Irregular — not part of a pattern or routine

Examples of acceptable private use

• An occasional trip to the tip
• Helping a friend move house once or twice a year
• Stopping at the shops on the way home
• Driving the kids to school once in a blue moon because the other car broke down

Examples that make the vehicle taxable

• Using the ute as the family car
• Regular weekend trips
• Daily school drop‑offs
• Sporting runs every Saturday
• Taking the vehicle on holidays
• Any pattern of predictable, repeated private use

If the ute is being used like a normal household vehicle, the exemption is gone — and FBT applies.

2. When FBT Does Apply

If either of the two exemption conditions is not met:

• the vehicle becomes a car fringe benefit, and
• your business becomes liable for FBT.

This includes situations where:

• the vehicle is eligible, but private use is not limited
• the vehicle is not eligible, even if private use is limited
• the employee has the vehicle available for private use (even if they don’t actually use it)

3. Record‑Keeping Is Critical

Even if the vehicle is exempt, the ATO requires evidence to support:

• the vehicle’s eligibility
• the nature and extent of private use
• that private use is genuinely minor, infrequent and irregular

This may include:

• a dual cab eligibility assessment
• a private‑use declaration
• odometer readings
• policies restricting private use
• occasional logbook sampling

If the ATO reviews your business, they will ask for this.

4. Don’t Forget Reportable Fringe Benefits

If FBT applies, you must report the Reportable Fringe Benefits Amount (RFBA) on the employee’s:

• income statement (STP), or
• payment summary (if applicable)

This applies even if the employee doesn’t pay tax on the benefit — it affects things like:

• Medicare levy surcharge
• HELP/HECS
• Family Tax Benefit
• Child support

So it’s important that it is prepared correctly to avoid any later data match amendments.

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Our Practical Advice

We’re all about making the complex simple. This section is straight‑to‑the‑point on what you as a business owner can do right now — so you can stay compliant, stay organised and stay focused on what matters.

• ✅ If you have a current, compliant logbook, make sure odometer readings are still being maintained.
• ✅ If there is any uncertainty, start a new 12‑week logbook immediately.
• ✅ Don’t rely on estimates or memory – the ATO won’t accept them.
• ✅ Ask us before FBT is finalised, not after the ATO comes knocking.

FBT is an area where prevention is far cheaper than correction. A little discipline now can save a lot of tax, penalties and stress later.

If you’d like help reviewing your vehicle records or deciding whether the actual method is appropriate for your situation, reach out to our team before FBT is finalised.

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Wrapping It Up

Here at the Bee Group we can help you navigate the obligations relating to FBT.

If you would like specific advice tailored to your business and situation, Bee Group Accountants offers affordable service packages where you can work with us one-on-one to help you get your business where you want it to be. Book your Discovery Call to find out more.