You wouldn't be blamed for assuming Fringe Benefit Tax (FBT) wouldn't apply to motor vehicles during the Level 4 lockdown period. Other than essential workers, most employees were either working from home or simply unable to work at all and therefore most vehicles were 'parked-up'.
However, a fundamental premise of how FBT applies to vehicles is that it is focused on "availability" rather than actual use. As such, Inland Revenue has confirmed that if an employee had the right to use a motor vehicle for private purposes, then this will attract an FBT liability as normal – regardless of whether the employee actually used the vehicle.
With the benefit of hindsight, employers who took the pro-active step of engaging with their employees to agree restrictions regarding the use of company vehicles during the lockdown period could have reduced their FBT cost. However, understandably, FBT was not at the forefront of businesses' minds as attention was on likely focused on more important issues such as cashflow and customer relationships.
While we hoped there wouldn't be another lockdown we find that sadly isn't the case with Auckland in level 3 and the remainder of the country in level 2, engaging with employees to agree on the restrictions of company vehicles could be something to address.