The ATO has finalised a practical compliance guideline to address the compliance challenges faced by taxpayers in relation to separately identifying home charging costs for electric vehicles (EVs) from the total electricity consumption of a household. Practical Compliance Guideline PCG 2024/2 can be accessed here.
It sets out a method that calculates the cost of electricity when an EV is charged at an employee’s or an individual’s home. Taxpayers may choose to apply a rate of 4.20 cents per kilometre travelled in an FBT or income year.
Fringe benefits tax
If an employer provides an employee or associate with an EV that lead to the provision of car, residual or expense payment benefits, as per this guideline, will have the option to use the shortcut method ie a rate of 4.20 cents per kilometre travelled to calculate taxable value of such benefits
Income tax deductions
The shortcut method can also be used by an individual taxpayer to calculate work-related car expenses for income tax purposes when using the logbook method, for a motor vehicle which is not a car, a deduction may also be claimed by calculating the total kilometres travelled by the vehicle during an income year.
Eligibility for making a claim
To be eligible to apply this method, yearly odometer readings, logbooks and at least one electricity bill must be maintained/obtained.
Adopting this methodology is optional, and a taxpayer may choose to opt-out/opt-in on a yearly basis.
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Please note that this information is not specific and is general in nature and cannot be relied on as advice. Please contact us for advice specific to you and your circumstances.