The Fringe Benefit Tax (FBT) rules on car parking were meant to target city businesses where car parks in commercial car parks were provided as an employee benefit.
In 2019, the ATO released a Draft Ruling about car parking that will increase Fringe Benefits Tax (FBT) compliance from businesses who were previously exempt from FBT on car parking.
In this draft ruling, employers whose car parking at their business are within 1 kilometer radius of an airport, shopping center, hospital, university, hotel and conference centre, or any other car space offered for all-day parking, may now be liable for FBT on car parking benefits.
Our national professional accounting bodies have, questioned and called ATO to withdraw such ruling, raising several issues: the divergence of the law from the policy intent, the impacts on previously unaffected taxpayers and the compliance approach that will be taken by the ATO.
The ATO has yet to provide a statement answering the professional bodies, which makes it hard for us to advise you on FBT and car parking. We will keep you posted on whether it affects our business clients, in the next two months, assuming the ATO responds in a timely manner.
Fringe Benefits Tax and Motor Vehicles: Don’t Pay Too Much Tax!
As the FBT Year is about to end 31 March 2020, be reminded that all vehicles claimed in a business should have an MV logbook, taken over 13 weeks, and created within the last 4 years, to reduce any fringe benefits tax on private use.
It is important to record the odometer readings of your vehicle/s as at 31 March 2020, and again at 30 June 2020. Without the logbook and odometer readings, a motor vehicle will be deemed to be 100% private and attract FBT.
If you are only claiming your vehicle using the 5000 km cents per km method, still take your odometer readings each 31 March and 30 June, to support the number of total km you are traveling in a year, to support your tax claims.
For a bit of extra bookwork, make sure your MV claim is a valid and legitimate tax deduction, and save yourself some tax