a) How does a liability for fringe benefit tax arise if an employee uses a car that is owned by their employer?Why do you think Parliament has legislated for liability to FBT to be established on this basis?What problems do you think it might create for employers (other than having to pay FBT)?

(b) What factors might be relevant in an employer's decision to either provide a fringe benefit to an employee or instead offer them a salary increase?In what areas could employer potentially gain a tax advantage by providing fringe benefits to their employees?