"We applaud the ATO in setting a realistic goal post before it embarks on any compliance blitz going forward," he said.

Use of an ordinary sedan or SVU supplied by an employer, including travel to and from work, is a fringe benefit and therefore incurs tax. However, utes that meet certain criteria are exempt, which means they can be provided as a tax-free perk.

For somebody who lives a long way from their employer and commutes daily using a ute, the benefit can be substantial.

"Even though they are capable to carrying passengers they are principally designed to carry a load and that's why they fall into this category," Mr Greco said.

"The market has run amok catering for this, producing some really well equipped and nice-looking utes," he said.

It is the obligation of employers to ensure private use does not occur.

But the ATO does little compliance work in the area, according to Mr Greco.

"You can give a tradesperson who you employ in your construction company a vehicle to use principally for work and then no-one monitors what they do with those utes after hours," he said.


"They're towing boats, they're towing caravans, they're doing a trip up to Queensland."

The draft ruling suggests allowing a diversion of up to two kilometres during the journey from work to home and vice versa, plus up to 750kms a year of non-work travel.

A third requirement is that no return journey for wholly private purposes exceeds 200kms.

The Ford Ranger ute was Australia's top selling vehicle in September, 2017 with 4,318 purchased by buyers, with Toyota's Hilux ute the second biggest seller across the entire market at 3,822.

The FBT tax status of four-door utes, which can double as a family car on weekends, had contributed significantly to their popularity, Mr Greco said.

"These types of utes now make it in the top ten best sellers," he said.

Sales of passenger cars and SUVs are down, according to figures released by the Federal Chamber of Automotive Industries in September.