PKF Kerikeri

FBT during lock down

FBT applies when a vehicle is ‘made available’ for private use. This requires the employer to give permission and to give practical and unconditional access to the vehicle.

There are no specific changes to the legislation for FBT and the use of motor vehicles as a result of the COVID-19 lock down. However, given the limited ability to actually use the vehicle, there is an opportunity to prohibit all private use during the lock down period. This would mean the vehicle is not being ‘made available’ as the employee does not have permission (this would equally apply to shareholder employees).

Given the current situation, a full prohibition of private use by the employer makes complete sense, especially since a part of the lock down is to encourage people to ‘stay home’. As long as the employee has access to another vehicle for essential private use, they will be able to comply with the restriction as well as go to the supermarket or any other permitted travel during the lock down period.

This needs to be in writing and acknowledged by the employee. A letter prohibiting private use of the vehicle during the lock down would need to be emailed to the employee, with a request that they acknowledge receipt and acceptance of the conditions.

You may already have some form of restriction in your original FBT letter, in which case your email would also need to state that this letter overrides the original one for the duration of the lock down period.

We have provided a template below for you to edit with your business details. If you need support with your business, please contact one of our experienced team members on or 09 4077142

Template - FBT Letter COVID-19