For those private tax paying entities including companies and trusts, it’s often easier and more convenient to recognise motor vehicle benefits taken by related-parties via accounting adjustment than via reporting and lodging fringe benefit tax returns.

 

To record a benefit, first calculate the benefit and then pass a journal entry, recognising the benefit as revenue and the benefit taken as a debit in the director’s or beneficiaries’ loan account. Be sure to consider GST if the entity is registered.