Most business owners understand the basic logic of Fringe Benefits Tax: if your business provides something that looks, feels, and drives like a personal benefit, the tax system would like a word.
Where things get genuinely interesting is in the grey areas. And recently, one of those grey areas turned up at a tribunal painted bright red, wearing a prancing horse badge, and apparently expecting a warm welcome.
A tax agent argued that a Ferrari provided through their business was exempt from FBT on the basis that it wasn’t used for private purposes. The tribunal disagreed. Emphatically.
Which raises a question worth sitting with, not whether a Ferrari can technically be FBT-free, but how easy it is to drift from legitimate tax planning into positions that are, shall we say, difficult to defend at pace.
The real lesson has nothing to do with Ferraris
Very few of our clients are running supercars through their business. But many do provide vehicles, phones, laptops, or other benefits where the line between business and private use isn’t always perfectly clean — and that’s completely fine. The rules accommodate real-world complexity. What they don’t accommodate quite so well is wishful thinking dressed up as record-keeping.
The risk rarely comes from something outrageous. It usually comes from something much more ordinary: assuming “mostly business use” is the same as “no private use,” keeping logbooks that reflect optimism rather than reality, or treating documentation as a formality rather than evidence. None of these feel unreasonable at the time. Most become uncomfortable later.
Two extremes, both unhelpful
There’s a tendency, when FBT feels complicated, to go one of two ways: either treat clearly private benefits as purely business because they sit inside a company structure or overcorrect and pay more tax than necessary because navigating the rules feels harder than just writing the cheque.
Neither is the goal. The goal is to claim what’s legitimately claimable, pay what’s properly payable, keep records that reflect reality, and sleep well at night.
A useful internal test: if the explanation for a position relies on the phrase “technically,” “in theory,” or “no one will ever check,” it’s worth pausing. Not because the position is necessarily wrong, but because it deserves proper scrutiny before it becomes someone else’s question to ask.
Our role in all of this
Our job isn’t to stop you claiming legitimate benefits. It’s to make sure those claims are structured, documented, and defensible, aligned with both the letter and the spirit of the rules.
Not giving up the Ferrari. Just making sure it isn’t pretending to be a delivery van.
If you’re providing vehicles or other benefits through your business and would like a quick review before the end of the FBT year, reach out now. It’s a much easier conversation to have before anyone starts asking about the logbook.