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You may be providing a car parking fringe benefit and not be aware of it!

The Australian Taxation Office (ATO) has been transparent in its undertaking of numerous fringe benefits tax (FBT) audits in both the small and medium business sector. With the ATO’s sophisticated data matching capabilities, it is easier for them to identify businesses that do not comply with their FBT obligations.

One fringe benefits that is often missed is car parking. Note, a car parking fringe benefit will arise if the employer provides car parking to its employees and meets all these conditions:

  • The vehicle is parked at premises owned by, leased to, or under the control of the employer
  • The vehicle is parked for a total of four hours or more between 7:00 am and 7:00 pm
  • The vehicle is provided by the employer or is owned by, leased to, or under the control of the employee
  • The parking is provided in respect of the employee’s employment
  • The parking is at or near the primary place of employment
  • The vehicle is used by the employee to travel between home and work or vice-versa
  • There is a commercial parking station that charges a fee greater than the car parking threshold (more than $8.66 a day for the current FBT year) for all-day parking within a kilometre radius of the premises where the vehicle parking is provided.

Want to know more about employee benefits that may be subject to FBT? Read our article here.

Relief for small business

Small businesses providing car parking for their employees may be exempt from car parking FBT if all of the following conditions are met:

  • The parking is not provided in a commercial car park
  • The employer is not a government body, a listed public company, or a subsidiary of a listed public company
  • The employer had a gross total income for the last income year before the relevant FBT year of less than $10 million, or for earlier periods was a small business for the last income year before the relevant FBT year.

If you need assistance or wish to discuss the most cost-effective method of dealing with fringe benefits, please contact McKinley Plowman accountants here.

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