Tech Discussion for tax accountant

jeff_lawsons

1.  Company ABC Pty Ltd is a trading company.
2.  ABC Pty Ltd owns a car and provided a car fringe benefit to the employee - Mr Smith
3.  Mr Smith receives wages from ABC Pty Ltd.
4.  Mr Smith pays for all the running costs of the car, no car allowance received from ABC Pty Ltd
5.  We calculate the fringe benefit or taxable value of the car provided is $5,000 (before employee contribution)
6.  Mr Smith has paid $15,000 worth of running expenses in the year
5.  Hence there is zero taxable value with an excess of $10,000 that Mr. Smith has paid for running costs.

Question :

Can Mr Smith claim the 10,000 in his personal tax return as a D1 expense? (Ignore GST issue)


( Section 51AF ITAA 1936 states that an employee cannot claim a deduction for car expenses they incur if the car has been provided to them by an employer and it is available for their private use or for use by their relatives. )

jeff_lawsons

If not deductible, will it be different if Mr Smith receives MV allowance?