It’s getting closer to the time that FBT returns need to be lodged, so it’s important to understand that there may be a change to the FBT liability of your business when it comes to one employee benefit.
FBT applies to parking provided by employers to their employees where there is alternative parking available commercially. A recent ruling on how car parking is treated as a FBT liability came into effect on April 1 this year. The ruling should assist in reducing the potential FBT burden on some employers and perhaps be an incentive for bringing employees back into the workplace.
Car parking as a FBT benefit is provided on a particular day when, between 7.00am and 7.00pm:
- a car is parked at a work car park for the minimum parking period;
- an employee uses the car in connection with travel between their place of residence and primary place of employment at least once on that day;
- the work car park is located at or in the vicinity of the primary place of employment, on that day;
- a commercial parking station is located within a one-kilometre radius of the work car park used by the employee;
- the lowest representative fee charged by any commercial parking station for all-day parking within a one-kilometre radius of the work car park exceeds the car parking threshold;
- the parking is provided to the employee in respect of their employment, and
- the parking is not excluded by the regulations.
However, a car parking benefit provided in respect of an employee is exempt where:
- the car is not parked at a commercial parking station;
- the employer is not a public company or a subsidiary of a public company;
- the employer is not a government body; and
- for the income year ending before the start of the FBT year, the employer’s assessable income is less than $10 million or alternatively, it is a ‘small business entity’ (SBE).
Other FBT benefits that employers may be able to claim back on in their FBT return could include COVID-19 related benefits (such as office equipment, technology, etc), company cars, meals, entertainment, living away from home allowances, and more. As a result of the impact
If you need assistance with preparing your FBT return for lodgement, we can assist you with understanding your obligations and preparing your return.
A failure to correctly identify whether your business has hired an employee or a contractor could net serious penalties. However, the Australian Taxation Office has made it easier to determine the correct classification of people working for a business, particularly in terms of their tax and super obligations.
This article was originally written by Hall Chadwick Melbourne. For any assistance with understanding FBT and the changes above, please contact your Hall Chadwick QLD advisor.