Four more proposed FBT compliance record keeping simplification measures have been announced.
Once passed the measures will have effect for the 2023/24 and later FBT years.
The additional measures are set against the backdrop of the Government announcement in the 2020/21 Federal Budget seeking to simplify FBT compliance record keeping requirements.
Two other simplification measures were initially announced in a draft legislation package released in September 2022 dealing with:
- travel diaries: currently a travel diary in the prescribed format is required for domestic and/or international travel in order to reduce the taxable value of certain travel related benefits. It is proposed that where an employer has access to the requisite detail in other alternate records (such as an employee’s online work calendar) this may suffice to allow the reduction in taxable value; and
- relocation transport (see further below).
The four more recently announced measures (announced by way of draft Legislative Instruments) deal with:
- LI/2023/D3 – overseas employment holiday transport
- LI/2023/D4 – car travel to employment interview or selection tests
- LI/2023/D5 – remote area holiday transport
- LI/2023/D6 – car travel to certain work related activities
All four measures, and the relocation transport measure, deal with benefits that are paid based on car travel reimbursements calculated on a ‘cents per kilometre’ basis. The measures each provide for alternate records to be used to support a reduction in taxable value of the benefit instead of an otherwise prescribed employee declaration. Employee declarations are a feature of FBT record keeping obligations and generally require an employee to confirm by way of declaration certain details that are required to be provided. In relation to these benefits the details are required in order to permit a reduction in taxable value of these cents per kilometre based car travel benefits. The alternate records that may be used instead of a declaration will likely be found on employee reimbursement claims (although care should be taken to ensure all required details are provided).
It is optional as to whether an employer uses the alternate records to support reductions in taxable value. We suppose much will depend on what alternate records exist (or could be modified or created), the information contained in those records, and how practical they are to access.
Whether employers consider using alternate records for these type of taxable value reduction is a ‘compliance simplification’ remains to be seen.
Employers d0 have the option of continuing to deal with compliance as they have historically done (by obtaining travel diaries and employee declarations).
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