Fringe Benefits Tax Assessment (Adequate Alternative Records – Private Use of Vehicles Other Than Cars) Determination 2024

The instrument relies on a narrow set of concepts drawn from the Fringe Benefits Tax Assessment Act 1986 and two income tax Acts mentioned in the instrument. The principal concepts and how the instrument uses them are:

• Residual fringe benefit: The instrument repeatedly ties the alternative records to residual fringe benefits associated with private use of a motor vehicle other than a car. The term is referenced as defined in section 136 of the Act, which the instrument notes supplies definitions for 'car', 'motor vehicle' and 'residual fringe benefit' (s 4, note).

• Motor vehicle other than a car: The instrument applies only to vehicles that fall within the Act’s definition of motor vehicle but not the Act’s defined class of car. The distinction matters because cars are excluded by the instrument; the instrument does not itself define these terms but relies on the Act’s definitions (s 4, note).

• Business use kilometre: The instrument introduces the defined term business use kilometre, meaning a kilometre travelled by a motor vehicle (other than a car) in the course of a business journey. The explicit introduction of this term narrows the measurement to whole kilometres and ties the calculation to business-journey usage (s 4).

• Statutory evidentiary document: The instrument identifies the declaration referred to in paragraph 52(1)(c) of the Act as the statutory evidentiary document employers would ordinarily use to reduce taxable value, but only where such a declaration has been given. Where it has not been provided, the instrument prescribes alternative written records that are treated as adequate evidence for the specified class of employers (s 5(1)(b), s 5(2)(e)).

• Otherwise deductible rule and once-only deduction: The instrument situates its alternative-records pathway in the framework of the Act’s 'otherwise deductible rule' in section 52, and references the Income Tax Assessment Acts 1997 and 1936 in describing the circumstances where a once-only deduction would have been allowable to the recipient had they incurred the expenditure (s 5(2)(c), note to s 6(2)). The instrument therefore connects the FBT reduction mechanics to the income tax entitlement that the recipient would have had.

• Required metric items: The instrument prescribes discrete data points that records must contain to qualify as adequate: employee name, vehicle details, date(s) of provision within the FBT year, total whole kilometres in the period, total whole business use kilometres in the period, and the percentage of operating costs that the employee would have been able to deduct (s 6(1)(a)-(f)). These items are the core evidentiary triggers for applying the otherwise deductible reduction in the taxable value of the fringe benefit.

• Form and multiplicity: The instrument allows flexibility in form, specifying that any type of record, and any number of records, can contain the required information (s 6(2)). However, all records must be written in English (s 6(1) opening).

The instrument therefore translates the generic judicial or administrative concept of 'adequate alternative records' in subsection 123AA(1) into a concrete checklist for a defined class of employers and a defined class of motor vehicles, with a clear linkage to kilometre-based apportionment under the otherwise deductible rule in s 52 of the Act.

The instrument identifies a tightly drawn class of persons who may rely on the alternative-records pathway, and it delineates the primary stakeholders affected.

Employers: The principal subjects are employers who provide employees with a residual fringe benefit in respect of private use of a motor vehicle other than a car, and who seek to reduce the taxable value of that fringe benefit by reference to the employee’s business use kilometres. The class of persons is set out in s 5(2). Employers in that class must make a choice: either obtain the statutory declaration under paragraph 52(1)(c) of the Act where available, or, if such a declaration was not given, rely on the adequate alternative records prescribed by this instrument and subsection 123AA(1). The instrument therefore affects employer recordkeeping practices, calculation methods for FBT, and evidentiary posture in the event of review or audit (s 5(2)(e)-(f), s 6).

Employees: Employees who receive private use of a motor vehicle other than a car and who use the vehicle for business travel are affected indirectly. The instrument requires records to capture the employee’s name, dates of vehicle provision, kilometres travelled overall and for business use, and the percentage of operating costs the employee would have been able to deduct had they incurred them (s 6(1)(a)-(f)). The representation of these facts in employer-held records may affect the taxable value of benefits attributed to the employee, and therefore employers’ FBT liabilities and, potentially, employees’ reported entitlements in other tax contexts.

Tax administration and auditors: The Australian Taxation Office and its officers acting under the Act are affected because the instrument prescribes what will be treated as adequate alternative records for the purposes of subsection 123AA(1), as specified under subsection 123AA(2) (s 5(1)(d)). This creates a documented standard that auditors can refer to when assessing whether the employer has validly reduced taxable value when the statutory declaration is absent.

Other tax regimes: The instrument draws in the Income Tax Assessment Acts 1997 and 1936 by reference to the hypothetical once-only deduction an employee would have been entitled to claim had they incurred the expenditure (s 5(2)(c)). That cross-reference means that tax professionals working across income tax and fringe benefits will be affected by the interaction when computing the percentage of operating costs and establishing whether the once-only deduction condition is met.

Vehicles and fleet managers: The application to "motor vehicle other than a car" means fleet managers and businesses operating non-car vehicles, for example utilities, vans, trucks, and certain specialised vehicles, are the immediate operational audience. The definition of 'business use kilometre' in s 4 also focuses the compliance effort on the accurate measurement of business journeys by such vehicles.

Who pays and who decides: Employers ultimately pay fringe benefits tax. The instrument gives employers a decision point: to rely on the statutory declaration, or, if none has been given, to rely on the specified adequate alternative records (s 5(2)(d)-(f)). Employers therefore decide whether to use this instrument’s pathway, but the instrument sets mandatory content requirements for the records they must hold if they do so (s 6(1)).

Geographic and temporal scope: The instrument commences 1 April 2024 and applies to the FBT year ending 31 March 2025 and beyond (s 2 and s 5(1)(a)). The instrument does not purport to be retrospective to earlier FBT years.

The instrument creates a set of duties on employers wishing to rely on the alternative-records route, and it clarifies a right to treat certain records as adequate evidence for FBT reduction purposes. These are the principal duties and rights set out in the text.

Employer duties to create and retain specific records: To qualify as "adequate alternative records" an employer’s records must be written in English and contain six specified items: the employee’s name (s 6(1)(a)), details of the vehicle (s 6(1)(b)), the date or inclusive dates on which the vehicle was provided during the FBT year (s 6(1)(c)), the total number of whole kilometres travelled in the vehicle during that period (s 6(1)(d)), the total number of whole business use kilometres travelled in the vehicle during that period (s 6(1)(e)), and the percentage of operating costs for the vehicle for which the employee would have been entitled to claim an income tax deduction had they incurred those costs (s 6(1)(f)). The employer may record these items in any type of record and may distribute them across any number of records (s 6(2)).

Employer right to use alternative records in lieu of statutory declaration: Employers who meet the class conditions in s 5(2) and who were not given the declaration required by paragraph 52(1)(c) of the Act may rely on these adequate alternative records to reduce the taxable value of the fringe benefit under the otherwise deductible rule in section 52 of the Act (s 5(2)(e)-(f); note to s 6(2)). This right is conditional on the employer having chosen to ascertain the reduction by reference to business and private use kilometres (s 5(2)(d)).

Choice and calculation duty: The instrument requires an employer who wishes to exercise the alternative route to actively choose to ascertain the reduction by reference to the kilometres travelled (s 5(2)(d)). This creates a duty to calculate the reduction using either business use kilometres as a proportion of total kilometres, or private use kilometres as a proportion of total kilometres, as referenced in the instrument’s explanatory note (note to s 6(2)). The instrument therefore places a substantive measurement duty on the employer.

Conformity with income tax entitlement: The percentage of operating costs included in the records must reflect "the percentage of operating costs for the vehicle for which the employee would have been entitled to claim an income tax deduction, had they incurred those costs" (s 6(1)(f)). This ties part of the evidentiary content to an assessment under income tax law. The employer therefore bears the duty to determine and record that percentage in a manner consistent with the income tax Acts referenced in s 5(2)(c).

Language requirement: Records must be written in English (s 6(1) opening). This imposes a procedural duty on employers to translate or otherwise ensure records are in English.

Temporal duty: The instrument applies for the FBT year ending 31 March 2025 and all subsequent FBT years (s 5(1)(a)); employers must ensure their records cover the relevant FBT year, including the date(s) on which the vehicle was provided during that FBT year (s 6(1)(c)).

No new express penalties or enforcement regime in the instrument: The instrument does not itself create fines, criminal penalties, or additional enforcement powers; it specifies matters for the purposes of subsection 123AA(2) and prescribes what constitutes adequate alternative records for subsection 123AA(1) (s 5(1)(d), s 6). Enforcement and any penalties would consequently arise under the Act and general administration of the tax law rather than under this instrument itself.

Interaction with the statutory declaration: The instrument recognises the statutory declaration under paragraph 52(1)(c) of the Act as the primary evidentiary document (s 5(1)(b)). The employer’s right to rely on the alternative-records pathway exists only where a declaration that satisfies paragraph 52(1)(c) was not given (s 5(2)(e)). This means employers have a duty to check whether a declaration was provided before electing the alternative route.

Evidentiary function: The instrument confers an evidentiary right on employers who hold the specified records, by specifying them as adequate for the purposes of subsection 123AA(1) and as a matter specified under subsection 123AA(2) (s 5(1)(d), s 6). That right converts a set of records into an acceptable alternative evidentiary basis for reducing the taxable value under section 52 of the Act when the statutory declaration is absent.

This instrument does not itself prescribe civil penalties, criminal offences, or new enforcement mechanisms. Its operative effect is to prescribe what constitutes adequate alternative records for the purposes of subsection 123AA(1) of the Fringe Benefits Tax Assessment Act 1986, and it is made under subsection 123AA (s 3 and s 5(1)(d)). Accordingly, enforcement, audit, and any penalties for non-compliance fall back to the existing enforcement and penalty provisions contained in the Act and the general administration of the tax law, rather than to provisions within this instrument.

What this implies operationally is the following: if an employer relies on the instrument by treating records meeting s 6(1)(a)-(f) as adequate, the Australian Taxation Office or other relevant officers will assess whether the records actually meet the instrument’s content and form requirements, and whether the employer is within the class of persons set out in s 5(2). If the records or the employer’s position do not meet those thresholds, any adjustments, assessments, penalties, interest or sanctions will need to be pursued under the Act’s existing compliance framework. The instrument therefore narrows the evidentiary debate by prescribing a checklist; it does not alter the Act’s broader penalty or enforcement regimes.

Key enforcement touchpoints likely to arise under the Act (as informed by this instrument) include:

• Whether the employer was in the class described in s 5(2) at the time of making the reduction in taxable value, including whether the employee used the vehicle for business use, whether the employer elected to ascertain reduction by reference to kilometres, and whether the relevant statutory declaration was absent (s 5(2)(a)-(f).

• Whether the employer’s records are written in English and contain the specific six items in s 6(1)(a)-(f). The instrument’s explicit instruction that only whole kilometres be recorded (s 6(1)(d)-(e) specifying "whole kilometres") means auditors will be able to test rounding and aggregation.

• Whether the percentage of operating costs recorded by the employer corresponds to the employee’s hypothetical entitlement under income tax law, as referenced in s 6(1)(f) and s 5(2)(c). Any disagreement about that percentage would therefore require reference to the income tax legislation mentioned in the instrument.

Because the instrument does not itself create penalty provisions, its role in enforcement proceedings will be as defining a statutory standard of adequacy for alternative records. An employer who presents the prescribed records is relying on the instrument to establish an evidence base; if those records are deficient, the employer’s FBT calculation may be adjusted and any resultant penalties assessed under the Act. The instrument is therefore an evidentiary template rather than an enforcement statute.

This determination is explicitly drafted as an instrument under the Fringe Benefits Tax Assessment Act 1986, and it interacts directly with provisions of that Act and indirectly with the Income Tax Assessment Acts. The instrument cross-references multiple components of the Act and two income tax Acts in the following ways.

Subsection 123AA of the Act: The instrument is made under section 123AA of the Act (s 3). Subsection 123AA(1) and (2) provide the statutory context for alternative records. The instrument specifies matters for the purposes of subsection 123AA(2), including the class of persons and the alternative records (s 5(1)(c)-(d)). Therefore, the instrument operates as a statutory determination of what records are "adequate alternative records" in the terms of subsection 123AA(1), and is binding for those purposes.

Section 52 of the Act , otherwise deductible rule and statutory declaration: The core substantive mechanism for reducing taxable value remains the otherwise deductible rule in section 52 of the Act. The instrument explicitly refers to the declaration in paragraph 52(1)(c) as the statutory evidentiary document that would otherwise be relied on (s 5(1)(b)). The instrument applies when the employer was not given such a declaration and chooses instead to rely on kilometres and the alternative records (s 5(2)(d)-(f)). The instrument therefore functions as an evidentiary substitute for the statutory declaration specifically in relation to residual fringe benefits connected to private use of motor vehicles other than cars.

Income Tax Assessment Act 1997 and Income Tax Assessment Act 1936: The instrument references these income tax Acts in the context of the once-only deduction that would have been allowable to the recipient had they incurred the expenditure (s 5(2)(c)). The percentage of operating costs that must be recorded (s 6(1)(f)) is expressed in terms of the employee’s entitlement to an income tax deduction. Consequently, the instrument requires employers, for evidentiary purposes, to make an assessment that relies on principles established in the income tax Acts. The instrument thus creates an interface where FBT apportionment is dependent on an income tax entitlement test.

Definitions in section 136 of the Act: The instrument does not redefine key terms such as 'car', 'motor vehicle' or 'residual fringe benefit'; instead it relies on those definitions in s 136 of the Act (s 4, note). This means the instrument’s applicability will be governed by the Act’s definitions. The instrument clarifies that it applies only to motor vehicles other than cars; so any classification disputes will be resolved by reference to the Act’s definitions.

Recordkeeping and evidentiary law: The instrument prescribes the content of records and allows flexibility in form and number (s 6(2)). It also mandates the language of the records , they must be written in English (s 6(1)). The instrument is silent about retention periods and other administrative recordkeeping obligations; those matters remain governed by the Act and related recordkeeping provisions or administrative practice. Practitioners should therefore treat the instrument as specifying content rather than replacing the Act’s broader documentary obligations.

No express interaction with other regulatory regimes: The instrument does not purport to amend or interact with privacy, workplace, vehicle registration or transport regulatory regimes. Where records required by the instrument contain personal or vehicle-identifying information, employers will need to manage any cross-regime obligations (for example privacy obligations), but the instrument itself does not address those matters.

In sum, the instrument is an evidentiary determination that sits within the structure of the Fringe Benefits Tax Assessment Act 1986 and connects to income tax entitlement principles in the tax code. It modifies the practical evidentiary mix available to employers in defined circumstances, but it does not change the substantive calculation rules in s 52 of the Act nor the definitions in s 136.

The instrument contains an internal commencement table at s 2 that records its commencement as 1 April 2024, and states that the whole of the instrument commences on that date (s 2, table). The instrument also contains the standard note that the table relates only to provisions as originally made and will not be amended within the instrument to deal with any later amendments (s 2, note). Beyond this commencement entry, the instrument does not record any subsequent amendments, variations, or repeals.

The instrument’s own text includes a further note in the commencement table indicating that any text in column 3 is not part of the instrument and may be edited in published versions (s 2(2) and the commencement table). No other amendment entries, transitional provisions, savings clauses or expiry dates appear in the instrument. The instrument does not purport to amend the Act itself; rather it is a determination made under the authority of section 123AA of the Act (s 3).

Because the instrument is drafted as a determination under section 123AA, any future amendment, revocation, or replacement of this instrument is a matter for subsequent instruments under the same statutory authority. The instrument does not record any prior instruments, nor does it incorporate by reference any earlier determinations. There is no internal history included within the instrument aside from the single commencement entry.

Practitioners should note the instrument’s retrospective or prospective effect is fixed to the commencement provision; it applies from 1 April 2024 for the FBT year ending 31 March 2025 and thereafter (s 2 and s 5(1)(a)). Any subsequent legislative or administrative changes to the Act, to subsection 123AA, or to the content of what constitutes adequate alternative records would need to be tracked through later instruments or amendments to the Act itself. The instrument contains no scheduled reviews or sunset clauses.

The instrument contains no statement of litigation history and does not cite any cases. There is no appellate or judicial material recorded in the instrument; it is a stand-alone administrative determination (s 3). Accordingly, the instrument itself does not document any prior disputes, tribunal or court decisions, or precedent concerning its application.

While the instrument does not present litigation history, it sets out factual and legal points where disputes and hence litigation risk could arise, because the operation of the instrument relies on interpretive questions that would, if contested, need to be resolved under the Act and its associated case law or administrative practice. The instrument’s text highlights potential points of contest that auditors, taxpayers, and courts might need to consider:

• Classification disputes: The instrument applies to motor vehicles other than cars, relying on the definitions in section 136 of the Act (s 4, note). Disputes may arise over whether a vehicle is a "car" or a "motor vehicle" as defined by the Act. The instrument itself makes no classification, so any disagreement would be resolved by reference to the Act.

• Adequacy of records: The instrument specifies what constitutes adequate alternative records (s 6(1)). A potential area of contention is whether the employer’s records actually satisfy each prescribed element, and whether the employer properly assembled the evidence from multiple records under s 6(2).

• Rounding and aggregation: The instrument requires total numbers of "whole kilometres" for total and business use (s 6(1)(d)-(e)). Disputes may arise about rounding practices, aggregation across journeys or periods, or the treatment of partial kilometres.

• Percentage of operating costs: The instrument requires the employer to record "the percentage of operating costs for the vehicle for which the employee would have been entitled to claim an income tax deduction" (s 6(1)(f)). This introduces an assessment under income tax law into the FBT evidentiary mix, which could be contested regarding the correct percentage or the factual premises underlying that percentage.

• Election to rely on kilometres: The instrument requires an employer to choose to ascertain the reduction by reference to kilometres (s 5(2)(d)). Litigation could arise about whether that choice was properly made and applied in a given case.

Because none of these disputes are resolved by the instrument itself, actual litigation would proceed under the Act’s adjudicative pathways and would interrogate the Act’s substantive provisions, subsidiary definitions, and evidentiary standards. The instrument does not preclude such litigation; it provides a statutory determination of adequacy that will be part of the evidence and legal argument in any contest.

This instrument contains several technical traps and conditionalities that may not be immediately obvious, and which create compliance and operational risks if overlooked. The following are concrete 'gotchas' directly grounded in the instrument’s text.

1. Scope restricted to motor vehicles other than cars: The instrument expressly applies to "private use of a motor vehicle other than a car" (s 5(2)(a)). It does not apply to cars. Employers that treat the instrument as applicable to cars will be outside the instrument’s stated class of persons. Whether a vehicle is a car for the purposes of the Act depends on definitions in section 136 of the Act, which the instrument incorporates by reference (s 4, note).

2. Only applies when statutory declaration is not given: The alternative-records pathway is available only where "the employer was not given a declaration that satisfies the requirements of paragraph 52(1)(c) of the Act" (s 5(2)(e)). Employers who have been given a declaration, or who could obtain one, cannot use the alternative-records route in respect of that benefit if the declaration satisfies paragraph 52(1)(c). Employers must check for the presence of that declaration before electing to rely on this instrument.

3. Employer must choose kilometre-based ascertainment: The employer must "choose to ascertain the amount by which the taxable value can be reduced by reference to the amount of business use and/or private use kilometres travelled" (s 5(2)(d)). The instrument therefore does not apply if the employer uses another permissible method under section 52. The choice is a precondition, not an automatic fallback.

4. Records must be in English: The instrument mandates that records be written in English (s 6(1) opening). Records in other languages will not qualify as adequate alternative records under this instrument. Employers using multi-language fleet documentation need translation or conversion to English.

5. Whole kilometres only: The instrument requires "the total number of whole kilometres" and "the total number of whole business use kilometres" (s 6(1)(d)-(e)). The requirement to record whole kilometres could produce rounding issues for employers aggregating journey data or for digital odometer readings. Practices that record fractional kilometres will need to adjust to whole kilometre reporting.

6. Percentage of operating costs tied to hypothetical entitlement under income tax law: The item required by s 6(1)(f) is the percentage of operating costs "for which the employee would have been entitled to claim an income tax deduction, had they incurred those costs." This means employers must apply income tax entitlement logic to determine that percentage. The instrument references both the Income Tax Assessment Act 1997 and the Income Tax Assessment Act 1936 in relation to a once-only deduction (s 5(2)(c)). Employers must therefore be clear on the relevant income tax tests, even though the instrument itself does not set those tests.

7. Multiple records permitted but must collectively contain all required items: The instrument permits the required information to be contained in any number of records (s 6(2)). Employers must still ensure that, when taken together, the records contain each of the six specified pieces of information. Fragmented or disjointed documentation that fails to link an employee’s name to the vehicle details and the kilometre totals could undermine adequacy.

8. The instrument does not prescribe retention periods or ancillary recordkeeping practices: Although the instrument prescribes content, it is silent on retention periods, signature or verification requirements, contemporaneity, or format beyond language. Those matters remain governed by the Act and administrative practice; failure to observe other statutory recordkeeping obligations could still produce compliance risk even where the instrument’s content checklist is met.

9. The instrument does not alter substantive computation under s 52: The instrument provides an evidentiary route; it does not change how the otherwise deductible rule is applied substantively. Employers must still apply s 52 to compute taxable value, using the kilometres or cost percentage as the evidentiary inputs mandated here. Misapplication of s 52 will not be cured merely by having the alternative records.

10. Applicability limited to the stated FBT years: The instrument applies from the FBT year ending 31 March 2025 and for subsequent FBT years (s 5(1)(a)). Employers attempting to rely on it for earlier years will be outside its temporal scope.

Each of these points arises directly from the text of the determination. Overlooking any of them may lead to an employer being unable to rely on the alternative-records mechanism and therefore facing a greater taxable value for the residual fringe benefit, with the usual consequent liabilities under the Act.

To rely on this instrument as the evidentiary basis for reducing the taxable value of a residual fringe benefit associated with private use of a motor vehicle other than a car, employers should ensure the following steps are taken, directly reflecting the instrument’s requirements.

1. Confirm the statutory prerequisites: Verify that the arrangement falls within the class described in s 5(2): that the benefit is a residual fringe benefit for private use of a motor vehicle other than a car (s 5(2)(a)), the employee used the vehicle for business use (s 5(2)(b)), and that a once-only income tax deduction would have been allowable to the recipient had they incurred the expenditure (s 5(2)(c)). Confirm that the employer opts to ascertain reduction by reference to kilometres (s 5(2)(d)) and that no declaration satisfying paragraph 52(1)(c) was given (s 5(2)(e)). The employer’s reliance on the instrument must be based on the factual matrix aligning with these elements (s 5(2)(f)).

2. Assemble records that meet the statutory checklist in English: Create or collate records, written in English, that contain the six items specified in s 6(1): the employee’s name (s 6(1)(a)); details of the vehicle (s 6(1)(b)); date(s) during the FBT year when the vehicle was provided (s 6(1)(c)); total number of whole kilometres travelled during that period (s 6(1)(d)); total number of whole business use kilometres in that period (s 6(1)(e)); and the percentage of operating costs the employee would have been entitled to deduct were they to incur those costs (s 6(1)(f)). The instrument permits these items to be recorded across multiple documents and in any format, but collectively they must be present (s 6(2)).

3. Ensure whole-kilometre reporting: Record odometer or distance figures as whole kilometres. The instrument specifically requires whole kilometres for both total and business use measurements (s 6(1)(d)-(e)). Establish a consistent rounding or aggregation policy that results in whole kilometre totals for the relevant FBT year.

4. Document the percentage of deductible operating costs: Determine the percentage of operating costs for which the employee would have been entitled to an income tax deduction had they incurred the costs, and record that percentage with the other items (s 6(1)(f)). Because this element relies on the employee’s hypothetical entitlement under the income tax Acts (s 5(2)(c)), document the factual and legal basis for the percentage, for example by recording the relevant assumptions about how operating costs would be apportioned and which income tax rules were applied.

5. Keep date coverage aligned with the FBT year: The records must identify the date or inclusive dates during which the vehicle was provided in the FBT year (s 6(1)(c)). Ensure the recorded period corresponds to the employer’s FBT year; the instrument applies from the FBT year ending 31 March 2025 and thereafter (s 5(1)(a)).

6. Check for the statutory declaration before relying on this instrument: Before treating the alternative records as adequate, confirm that no declaration satisfying paragraph 52(1)(c) was given. If such a declaration is available, it is the statutory evidentiary document identified by the instrument (s 5(1)(b)) and the employer should consider whether relying on that declaration is preferable.

7. Link kilometres to the otherwise deductible calculation: Use the recorded total and business use kilometres to calculate the reduction under the otherwise deductible rule in s 52. The instrument’s explanatory note indicates the number of business use kilometres will be used either to determine the reduction under the otherwise deductible rule using business use kilometres as a proportion of total kilometres, or to determine the final taxable value net of reduction using private use kilometres as a proportion of total kilometres (note to s 6(2)). Document which apportionment method was applied and how the recorded figures feed into the s 52 computation.

8. Maintain audit-ready linkage across records: While any number and type of records may be used (s 6(2)), ensure there is a clear, auditable link between the employee, the vehicle, the period, the kilometre totals, and the deductible percentage. For example, if using journey logs, fuel records and maintenance invoices in separate documents, create or maintain a consolidated reconciliation that ties these items together.

9. Preserve language conformity and translations where needed: If original documents are in another language, translate them to English and keep a record showing the translation, because the instrument requires the records to be written in English (s 6(1)). Keep translations and any translator attestations alongside the translated records.

10. Be prepared to justify the income tax entitlement assessment: Because s 6(1)(f) requires a percentage based on the employee’s would-have-been entitlement under the income tax Acts, keep contemporaneous notes setting out the legal basis and factual assumptions used to arrive at the percentage. This will assist in responding to enquiries about whether the percentage correctly reflects the income tax position referenced in s 5(2)(c).

11. Monitor for supplementary obligations under the Act: The instrument does not specify record retention periods, signatures, or other administrative formalities. Employers should therefore ensure compliance with any broader recordkeeping and retention obligations under the Fringe Benefits Tax Assessment Act 1986 and general tax administration rules, in addition to the instrument’s content requirements.

12. Apply the instrument only for the relevant FBT years and vehicle classes: Ensure the instrument is not applied retrospectively to FBT years prior to 31 March 2025, and that it is applied only to motor vehicles other than cars (s 5(1)(a) and s 5(2)(a)). Where in doubt about the vehicle’s classification under s 136 of the Act, seek verification or obtain a statutory declaration where feasible.

Following these steps will align an employer’s evidence with the instrument’s checklist and with the condition that the employer has elected to use kilometre-based ascertainment and that no paragraph 52(1)(c) declaration was given. The instrument’s flexibility as to record type and number is operationally useful, but it places a premium on internal reconciliation, accuracy in whole-kilometre reporting, and documented linkage to the income tax entitlement test.