When a “Work Ferrari” Becomes a Tax Trap: The Cautionary Tale Every Advisor Needs to Read 

In early 2026, an Administrative Review Tribunal (ART) decision put a spotlight on just how strict the ATO is about private use of vehicles — even when you think you’re using them for work. The case involved a well-known Perth accountant who bought a Ferrari through his firm and tried to argue it shouldn’t attract Fringe Benefits Tax (FBT). The outcome? A costly lesson about private use, statutory valuation and ATO compliance.  

 

The Facts: Ferrari, Work Trips and Instagram Posts 

Here’s what happened: 

– In 2013, the accountant’s firm purchased a second-hand Ferrari California (valued at around $346,000) and it was made available to the firm’s director.  

– The director claimed the Ferrari was for business use: driving to and from work, visiting clients and travelling between firm offices.  

– When the ATO audited the firm in 2021, it assessed FBT liabilities on the basis that the Ferrari was available for private use or personal enjoyment, which triggers a car fringe benefit under the law.  

What really damaged the defence was evidence — including Instagram posts and personal admissions — showing that the Ferrari was used for personal trips, including trips to wineries with the accountant’s partner. 
The Tribunal also found that: 

– The logbooks presented were not credible — they were created after the ATO requested them and were described as fabrications.  

– The Ferrari was not a commercial vehicle; it was designed to carry passengers, which meant the narrow limited private use exemption did not apply.  

– The personal use wasn’t “minor, infrequent and irregular” — one of the fundamental requirements to avoid FBT.  

In short: simply calling a Ferrari a work car wasn’t enough. The ATO and Tribunal treated the private use as a taxable fringe benefit. 

 

How FBT Was Calculated 

While specific final figures aren’t public, the statutory formula method is often used for high-value vehicles like this. Under current FBT rules, a car fringe benefit’s taxable value is typically: 

Base Value × 20% × (Days Available for Private Use ÷ 365)  

For a Ferrari with a base cost in the hundreds of thousands, that quickly translates to a very large taxable value, and after gross-up and the FBT rate (47% for most years), the result can easily exceed $60,000–$70,000 in FBT liability per year — even before penalties and interest.  

That’s why many commentators have pointed to this case as a practical example of how the tax on a luxury vehicle can quickly reach six figures if you ignore the rules. 

 

Key Takeaways for Business Owners and Advisors 

This case isn’t just a quirky news item — it carries clear lessons: 

1. “Available for private use” is what matters, not intention

If your employee or director can use a vehicle privately — especially if it’s garaged at their home — FBT applies. The law isn’t fooled by job titles or intentions.  

2. Logbooks matter — and they must be credible

Logbooks created after an ATO audit begins won’t hold up. Records must be contemporaneous and accurate.  

3. High-value cars attract scrutiny

Luxury vehicles like Ferraris aren’t just expensive — they’re exactly what ATO compliance teams look at first when reviewing fringe benefits.  

4. Minor personal use doesn’t exempt you 

Trips that include weekends away, winery visits or personal errands easily push you outside the “minor, infrequent and irregular” safe harbour.  

 

Why This Matters Beyond the Tax Bill 

It’s tempting to think that FBT is just another line item on a tax return. But in cases like this: 

– Employers face large annual tax liabilities  

– Directors and employees may have reportable fringe benefits impacting Medicare levy, HECS and government benefits  

– Professionals — including accountants — open themselves up to professional conduct issues if records are falsified or claims are misleading  

This isn’t theory. It’s a real-world example of how FBT compliance can make or break a year’s worth of planning. 

 

Linking It Back to the Rules 

If you missed the earlier article about how FBT is applied depending on vehicle type — from low-cost work utes to luxury cars — this Ferrari case is the perfect real-world foil. 

It highlights: 

– The narrow scope of exemptions  

– The importance of vehicle classification  

– The unforgiving nature of the statutory formula method  

If you’re considering providing vehicles to key staff — especially high-value ones — this case is a stark reminder: always think compliance first.