You invested in a plug-in hybrid vehicle—saving fuel, reducing emissions, and even scoring an FBT exemption.  Then the rules changed. And suddenly, what looked like a tax win could quietly become a compliance risk.

Let’s break it down simply—because this is where a lot of business owners get caught out. First, the good news.  The ATO has introduced a shortcut method to calculate home-charging costs for PHEVs. If your employee charges their vehicle at home, you no longer need complex electricity calculations.  You can use a simplified rate—as long as you meet the eligibility rules. That’s a win for admin. Less paperwork, more clarity. But here’s where it shifts.

From 1 April 2025, plug-in hybrid electric vehicles are no longer treated as zero or low-emission vehicles for FBT purposes.

That means:

• No automatic exemption
• No more “set and forget”
• And potentially new FBT liabilities for the 2025/26 year

Even if nothing changed in how you use the vehicle… the tax treatment did. And this is where many businesses get exposed—
because they’re still operating under last year’s assumptions.

This isn’t about doing anything wrong. It’s about staying aligned with what’s changed. If you provide vehicles to your team—or are thinking about it—this is your moment to pause and review:

• Are your vehicles still FBT-exempt?
• Are you capturing private use correctly?
• Are you using the new home-charging method properly?

Because small oversights here don’t stay small. They turn into amended returns, penalties, and unnecessary stress. Let’s get ahead of it—before the ATO does.

Need Help with your Business, Bookkeeping, Tax or SMSF requirements?

If you would like a little help, please get in touch with us for assistance. We can help with your business, bookkeeping, tax and SMSF requirements. To book an appointment, use our online booking system, give us a call on 07 3289 1700, or email us at reception@rgaaccounting.com.au.We look forward to assisting you this tax season!

Please also note that many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances. Should you have any further questions, please get in touch with us for assistance with your SMSF, business, bookkeeping and tax requirements. All rights reserved. Brought to you by RGA Business and Tax Accountants. Liability Limited by a scheme approved under Professional Standards Legislation.