Changes looming for FBT
An Official’s discussion paper was released earlier this year which, amongst other things, proposed taxing salary trade-off benefits. Whilst in concept many would believe this to be a move in the right direction, the suggested proposals appeared to be extremely wide.
The Minister of Revenue, Peter Dunne, has now advised that due
to public submissions received, the original scope to the proposals
has narrowed.
Although perhaps one should be grateful for the change in focus,
the proposed changes are still not without significant compliance
cost to employers. It also seems that we continue to introduce new
legislation that is not a one size fits all and therefore creates
extra compliance costs and complexity for the average business to
get their heads around.
The following changes are now proposed:
- Car parks provided to employees in the Auckland and Wellington
CBD will be the only car park targeted. (Perhaps part of a push to
move employees to public transport?) There will be some exclusions
such as for work vehicles, night shift workers and disabled car
parks.
- Car parks will be taxed under the FBT rules.
- Status quo will remain for charities. i.e. they will continue
to be exempt from FBT with one change in respect of vouchers.
- Vouchers provided by charities will be subject to FBT.
- On the back of other recent changes to social assistance, any
salary trade off arrangements will still need to be taken into
account when determining the entitlement to social assistance. This
will equally apply to employees of charitable organisations.
The changes are still a way off however are expected to become
effective from 1 April 2014 once enacted. Once the tax bill has
been released hopefully we will have more clarity on the detail to
the changes.
If you have any concerns regarding any of the points outlined
above we recommend that you seek advice from your Hayes Knight
adviser. Alternatively, please contact our Tax Team:
Phil Barlow
Tax Director
T + 64 9 414 5444
E phil.barlow@hayesknight.co.nz
Shelley-ann Brinkley
Senior Tax Manager
T +64 9 414 5444
E shelley-ann.brinkley@hayesknight.co.nz