April Fools??? On 1 April 2025, Inland Revenue released an Issue Paper looking at Fringe Benefit Tax. Some of the changes mooted in this paper are quite a departure from how many would view the FBT regime.

Motor vehicles would be one benefit we see many SME businesses have. The changes in this area are varied:

• Changing the value of the motor vehicle for FBT purposes based on how it is powered.
• Apportioning the benefit based on how it is predominantly used rather than tracking actual use.
• Turning FBT into a form of luxury car tax for shareholder-employees with a vehicle costing over $80,000.

For benefits that are not specifically classified as fringe benefits (such as gift baskets, gift cards, or discounted goods or services), the current position is that up to $300 per quarter or $1,200 per year of benefit can be provided without triggering fringe benefit tax. The proposal is to change this to $200 per benefit, provided it is not in substitution for remuneration. Alternatively, there may be a specific list of benefits that can be provided without FBT applying.

The entertainment limitation may also be integrated with the FBT regime. This would involve removing the current deduction limitation and instead treating entertainment as a fringe benefit that is not allocated to any employee.

These changes, should they proceed, will have wide-ranging impact on all businesses in New Zealand. On 10 April, Richard Muth will go through these changes. Whether you are a business owner or advisor, you need to be there.

Duration: 0.5 CPD hours (25 mins plus 5 mins Q&A)

PRESENTER

Richard Muth, Senior Manager – Tax Advisory, Findex/Crowe
Richard Muth is an experienced taxation practitioner at Findex / Crowe having more than 15 years of experience with clients ranging from large multinational groups, Australasian groups, New Zealand based SMEs along with high net worth individuals.