Helping clients understand how the new FBT exemption applies (and when it doesn’t) and making sure deductions are being claimed correctly can be challenging when working with clients to manage the demand for electric vehicles. This is especially true as the operating costs of electric vehicles can be significantly lower than those of traditional vehicles. In today’s blog, we’ll discuss a few questions regarding electric vehicles.

Q&As on Electric Vehicles

Take a look at the following section to get the answers to questions on electric vehicles:

  1. How do we help a sole trader to claim electricity costs on an electric vehicle?

We understand that sole traders are allowed to access or claim the business percentage of insurance, repairs, registration etc. The main issue is that the car is electric and doesn’t take fuel. Now, the question arises, how we can help them claim to charge costs on EVs?

Answer: Well, if the electric vehicle is used for producing income, then the costs of charging an electric vehicle can be deducted. The ATO gives guidelines on calculating the cost of electricity in the context of home offices. Furthermore, when dealing with a car, the same approach could be used. According to the ATO, the following three things need to be determined to calculate the electricity cost that is being used:

  • the cost per unit of used power – refers to electricity bills

  • the average units used per hour – indicates the power consumption per kilowatt hour for an item

  • the total hours that specific item used for producing income

2. Does an electric vehicle exempt from FBT need a logbook?

First of all, there shouldn’t be any need to do a logbook to claim the electric vehicle FBT exemption. However, the advantages of this exemption need to be considered to calculate the reportable amount of fringe benefits of the employee. Furthermore, it should be important to calculate a notional taxable value for the benefit with the help of the operating cost method or statutory formula.

It might be important for the employee to keep a log book if the employee wants to use the car for producing income in case the operating cost method would give a lower reportable amount. In simple words, keeping a logbook is not necessary and the client is allowed to use the statutory formula instead to calculate the reportable amount.


In a nutshell, it can be said that you don’t need to pay FBT on eligible electric vehicles and associated car expenses. You can also get in touch with Reliable Melbourne Accountants for more information a

bout FBT exemption on EVs.

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