Daniel Hodgson explores the car parking technology that's supporting Fringe Benefits Calculations.
The identification and calculation of car parking fringe benefits can be one of the most tiresome features of the fringe benefits tax (FBT) compliance process for employers.
Many employers have sought to manage their workload in this respect by applying the statutory formula to calculate the number of benefits they provide over the course of the year.
This has had the advantage in the past of being a 'safe harbour' that provides a reasonable tax outcome for the least amount of work.
However when you consider that, strictly, a car parking fringe benefit only arises where a car is parked in the space for at least 4 hours between 7am and 7pm on a working day, and that the statutory formula broadly assumes that one benefit is provided on each working day for each available space, the potential advantage of being able to apply accurate data on actual benefits becomes clear.
In-vehicle tracking technology, in some cases combined with boom-gate records, now makes it possible to accurately record when cars have been parked in the employer’s spaces, and for how long. This presents the opportunity for the employer to calculate the actual number of benefits that has occurred, rather than relying on the safe harbour.
Technology can assist further in establishing the taxable value of the spaces, based on the lowest rate for all-day parking offered by a commercial car park within one kilometre of the employer’s parking location.
Where an employer is able to obtain boom-gate or in-vehicle data for previous FBT years, KPMG has experience in obtaining the Australian Taxation Office’s agreement to revising the FBT assessments for those years. Depending on the circumstances, refunds may be available in respect of FBT returns lodged within 3 years (or sometimes more) of the amendment request.
© 2019 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.