Fringe Benefit Tax

[Chicken Legs]

Can anyone explain to me (in simple terms!) how to calculate the income tax I would pay on a company vehicle?

I've had a look at the IRD website but don't think I have sufficient information to use the calculator.

Does anyone undersatnd the basis of FBT.........

or is it just me being a bit dim?

[Jo and Andy]

Don't know but will be interested in the answer. Anyd given the impression that the jobs he is going for will give company car and other benefits.

[Avalon]

Not sure if this is any help, but some companies seem to get round it by giving a cash lump sum (which you pay normal income tax on) and then its up to you to sort out a vehicle with that money.

OH knows the dateils on the FBT, so ill check and mail it later.

[Avalon]

Ok, so apparently - if you get a company car - you pay "company rate tax" (33%) on the value of the car. Im not sure how this is worked out on a yearly basis -

I assume they do not charge on the whole of the car in 1 year because that would be truly scary.

On top of this -

the COMPANY pays Fringe Benefit Tax.

So the company, as well as forking out for your car -

has to pay the government 30%(ish) on the value of the benefit to you.

Consequently - not many of them do it!

Thats why many will go for a cash lump sum. You still pay the tax (at the prevailing rate - so 39% if you earn over 60K, but they dont have to cough up the extra money.

Hope that helps