One would be forgiven for thinking that the Government’s recent back down on charging FBT on carparks located in the Auckland and Wellington CBDs means that the status quo remains. However, the draft legislation as it was introduced actually includes four proposed changes that would see FBT apply when:

  • Carparks are provided in the Auckland and Wellington CBDs (to be withdrawn),
  • Carparks are acquired by an employer from a commercial carpark operator for more than $210 per month,
  • An employee specifically chooses to have their salary reduced to receive a carpark, and
  • Carparks are provided to an employee on the employer’s premises.

As we know, the Government has announced that the first item will not proceed, however they have made no mention of the remaining changes.

Given the detrimental effect to the Government of having to back down on the CBD element it may not have the appetite to push through all of the remaining changes. The only exception might be the salary sacrifice element, as this is part of a broader initiative by the Government to specifically tax salary sacrifice arrangements.

For some employers, the introduction of FBT on parking benefits may mean that it is no longer viable for businesses to provide this benefit as part of an employee’s salary package.

 

All information in this newsletter is to the best of the authors’ knowledge true and accurate. No liability is assumed by the authors, or publishers, for any losses suffered by any person relying directly or indirectly upon this newsletter. It is recommended that clients should consult a senior representative of the firm before acting upon this information.