Until recently, it was rarely a good idea for anyone in the medical profession to purchase a vehicle under their company name. This is because in most cases dentists and doctors don’t need to transport bulky equipment and driving is pretty much limited to a home - work - home scenario. Even in a situation where a dentist worked at more than one practice, the distances claimable between practices did not outweigh the FBT (Fringe Benefits Tax) payable.
So, what has changed?
The ATO announced an exemption on FBT on Electric Vehicles - subject (of course) to a few key conditions. Let’s take a look at what these are:
For the exemption to apply, all of the following requirements must be met*:
- the benefit is a car benefit
- the vehicle must be a car, which is a zero or low emissions vehicle (vehicle requirements)
- the car was first held and used on or after 1 July 2022 (held and used date requirements)
- the car is used or available for private use by a current employee or their associates (including family members) (recipient requirements)
- no amount of luxury car tax (LCT) has become payable on the supply of or importation of the car (LCT requirements).
The good news is that the Luxury Car Tax (LCT) thresholds on fuel efficient vehicles are currently at $89,332 for the current financial year (and was at $84,916 in the prior financial year)^.
Why do I need to act quickly?
From 1 April 2025, private use of a plug-in hybrid electric vehicle will no longer be eligible for the exemption unless you satisfy both conditions of a) the car was exempt before 1 April 2025 and b) you have a financially binding commitment to continue providing private use of that vehicle on and after 1 April 2025.
The other consideration is if your State Government has any Rebates or Subsidies on offer. We’ll post links to each state & territory’s offerings at the end of this article. Please be aware that some states have already closed their rebate schemes, and the remaining open ones generally have a set allocation and will close once funds are exhausted.
What if I'm a dental contractor?
No need to fret if you don’t have a company – at Amalgam Advisors, we can set you up with a new company so that you can make the most of the exemptions on offer.
Usually our fee to set up a company is $1,650, however if you let us know you have read this article, are an existing Credabl client, and quote "good things happen at Credabl", we will gladly discount this to $990 as a special offer to you. This offer is valid until 15 May 2024.
If you are in the market for a new car, now is the perfect time to consider an electric vehicle. The team at Credabl will certainly help you with any financing options.
As promised above, here are the rebate offerings state by state – but please research carefully as this information can change at any time:
QUEENSLAND currently holds one of the highest rebate schemes of between $3,000 and $6,000. However, this offer is only available until scheme funds are exhausted. https://www.qrida.qld.gov.au/program/queensland-zero-emission-vehicle-rebate-scheme
VICTORIA no longer has an active rebate scheme for ZEV’s (Zero Emission Vehicles), however are instead offering a rebate on Solar Panels of up to $1,400. At the time of writing, there are still over 4,000 rebates available in the current release. https://www.solar.vic.gov.au/solar-panel-rebate
NEW SOUTH WALES EV rebates have now closed, but if you purchased or placed a deposit on an eligible EV prior to 31 December 2023, you can still lodge applications up until 30 June 2024.
AUSTRALIAN CAPITAL TERRITORY has a few incentives on offer, including Stamp Duty Exemption, Free (2 year) Registration for ZEV’s or Discounted registration for hybrid vehicles – but this all ends 30 June 2024. https://www.accesscanberra.act.gov.au/driving-transport-and-parking/registration/incentives-for-low-and-zero-emissions-vehicles
NORTHERN TERRITORY is doing things a bit differently. They have a Stamp Duty waiver until 30 June 2027, an EV registration fee waiver, but instead of a rebate on the purchase of the vehicle, they are offering grants between $1,000 and $2,500 to buy and install electric chargers. This is on a first served basis until exhausted. https://dipl.nt.gov.au/strategies/electric-vehicle
SOUTH AUSTRALIA has also since closed its subsidy, but there is a three year registration fee exemption, for cars first registered up until 30 June 2025. https://www.treasury.sa.gov.au/Growing-South-Australia/incentives-for-electric-vehicles
TASMANIA is offering $2,000 rebates on ZEV’s until funds are exhausted, but to individuals only, NOT businesses. https://recfit.tas.gov.au/e-transport/guidelines_-_ev_purchase
WESTERN AUSTRALIA are offering a $3,500 rebate on vehicles with a dutiable value of $70,000 or less. The rebate is available until 10 May 2025, but is capped at 10,000 eligble vehicles – so this could come to an end much sooner. https://www.transport.wa.gov.au/projects/zero-emission-vehicle-zev-rebate.asp
Contact Amalgam Advisors
Amalgam Advisors look after Dental, Medical and Veterinary professionals Australia wide with offices located in both Victoria and Queensland. We are on hand to answer any tax and accounting questions you may have, so please feel free to reach out to us any time via your Credabl consultant.
