WA businessman’s efforts to avoid tax bill on $350k ‘work’ Ferrari rebuffed

A Perth tax agent has been accused of fabricating logbooks and lying about money he was given in his mother’s will as he claimed a $350,000 Ferrari bought through work was exempt from fringe benefits tax, with a tribunal finding he instead used the car to take his girlfriend on trip’s to Western Australia’s premier wine region.

The Administrative Review Tribunal dismissed an appeal by the man and his firm this week, after an audit by the Australian Taxation Commissioner uncovered fringe benefit tax liabilities relating to a Ferrari California bought in 2013 for the man to drive to and from work, and to visit clients across Perth’s metropolitan area.

The man’s name has been kept private due to a confidentiality order, and he has been referred to throughout a decision published this week as “Mr Jones”.

The tribunal heard the man’s firm – of which he is the sole director – bought the 2010 model second-hand for about $346,000 plus costs in 2013, and it was never registered as a fringe benefit.

Mr Jones asserted he never used the car for private purposes and never used it to carry passengers – meaning it was ultimately a car he used just for work.

However, the tribunal found logbooks of the car’s kilometres kept over the years didn’t match up with the mechanic where the car was often serviced.

On one occasion, the logbook recorded Mr Jones had driven 50 kilometres from his home to his office in Marmion, in Perth’s northern suburbs, when his diaries indicated he was actually in Sydney.

According to the decision, GPS maps also showed Mr Jones frequently overestimated how far it was from his house to his office, and Administrative Tribunal deputy president Clare Thompson SC ultimately threw the logbooks out as evidence.

“Specifically, I have found that the logbooks were fabricated for the purposes of the applicant’s dispute with the commissioner, and his written statements were deliberately misleading as to the accuracy of the logbooks,” she said.

“This causes me to have grave doubts as to the overall reliability of what Mr Jones has said in evidence other than when it is against his interest.

“For example the evidence of him taking his girlfriend as a passenger to Margaret River.”

While Mr Jones’ firm argued his use of the car was “minor, infrequent and irregular”, Thompson said Mr Jones had conceded under questioning he used the car more frequently than originally admitted.

During evidence, Mr Jones told the court he would travel once a year to Margaret River, Bunker Bay and Busselton – holiday destinations in the heart of WA’s premier wine region – where he had rental properties, to conduct inspections.

“Apart from monitoring my investments, a small portion of the time down south would involve having lunch at some wineries,” he told the tribunal.

The tribunal also found Mr Jones had lied about how the firm bought the car and paid off its payments, saying he had used money he had been gifted when instead the car had been purchased using a loan.

“My dearly departed mother very kindly left me some funds in her will which was used for the deposit,” he told the tribunal.

Thompson found that statement was “plainly designed to evoke some sympathy”, but said it showed the man was “cynical and scheming”.

Thompson upheld the commission’s remaining findings, and rejected the firm’s claims the car was ultimately a work vehicle.

The matter was dismissed.

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