Using technology to simplify Fringe Benefits Tax (FBT) reporting

Relying on drivers to collect the right kind of data for calculating Fringe Benefits Tax (FBT) for fleet means many businesses choose the easier statutory method of reporting, rather than the operating cost method.

But technology is now making it easier to collect the data needed to satisfy the ATO under the operating cost method, unlocking a number of benefits.

Gerard McLennan is CEO of LogbookMe, a cloud-based telematics platform that uses a plug-and-play device to collect real-time vehicle data. LogbookMe has a 10-year exclusive partnership with FleetPartners’ parent company, providing telematics for its fleets.

We talk to Mr McLennan about the ways in which technology simplifies FBT reporting for fleet, and highlights hidden value.

The essentials of LogbookMe

LogbookMe collects data via a plug-and-play device the size of a matchbox that plugs under the vehicle dashboard. Drivers can self-install the hardware, and the software has different modules that can be turned on for different reports. For fleet management, the system:

• Records mileage, behaviour and analytics.
• Automates the log book process.
• Looks for under-utilised cars.
• Performs driver profiling for safety.

Mr McLennan says there are more complicated, hard-wired telematics that collect much more data. LogbookMe’s value proposition is that it’s a third of the cost of those systems, and there’s no costly installation so the fleet is never off the road.

“And from a privacy perspective, we get a friendlier reception from unions,” Mr McLennan says.

“A lot of the hard-wired telematics is hard to implement with your driver population – they feel they’re getting Big-Brothered.”

LogbookMe means savings

Mr McLennan says most of their clients have tried logbooks, often without success.

“They have apps or paper records and drivers have to remember to manually record trips. Management never got a proper logbook back.”

While many businesses take this laissez-faire approach to fleet management, Mr McLennan says they are actually losing large amounts of money.

He tells the story of one client with 500 cars with 30% private use. Using LogbookMe through FleetPartners, that figure was reduced to about 12% and a saving of about $350,000 a year on fuel alone.

“They changed the behaviour just by letting people know they weren’t doing the right thing,” McLennan says.

At the same business, if management could demonstrate that a driver was using the vehicle for 85% business use, they could save $6,000 a year in FBT per car. In a fleet of 500 cars, that adds up to a tidy sum, and accurate logging is only possible through telematics technology.

Keeping within the fleet policy

Because LogbookMe can access live data, an ongoing proactive management of vehicles day by day is possible.

So if a driver drives a ute that’s ordinarily exempt, but not exempt due to their usage, LogbookMe will alert management. The driver can be told to stop driving that car when it reaches the threshold.

“If the fleet policy allows 10% private use, you can see when someone gets close to that and you can ask him to stop,” McLennan says. “Normally what happens is all that data gets lost so there’s no enforcement of the fleet policy. For the client, that equates to more cost of fuel, more depreciation of the car, higher mileage and maintenance.”

The ATO loves LogbookMe

The ATO has written a legally binding ruling to automatically accept the reporting generated by LogbookMe without questioning it. The system of using technology in fleet is continuing to evolve, with Mr McLennan suggesting that FleetPartners fleet management will continue to get smarter.