Car parking Fringe Benefits
If, on 1 April 2021, the lowest fee charged for all-day parking by each and all commercial parking stations within one kilometre of the premises on which the car is parked was less than the car parking threshold of $9.25, then no car parking fringe benefits will arise during the 2022 FBT year. This may be the case for many over the past year as lots of car parks dropped their rates.
Further, if car parks that are subject to FBT were not used during periods of lockdown – where the statutory 228 days method is used to determine the number of benefits provided – this number of days may be apportioned down for the periods the parking was effectively unavailable.
Looking ahead to the 2023 FBT year, there is a proposal to reverse some slated changes and maintain the status quo, according to an announcement by the Government on 29 March 2022. Historically, car parks that charge penalty rates for all day parking, so as to encourage shorter stays, were not considered ‘commercial parking stations’, so did not trigger FBT for employers providing parking to their employees within one kilometre. However, recent court decisions caused a change to this view and the ATO’s ruling, currently effective from 1 April 2022, includes a wider range of parking stations to be considered ‘commercial parking stations’ and thus potentially triggering an FBT liability for nearby businesses. In particular, many car parks at shopping centres, hospital, universities, etc. would be considered commercial parking stations under this view. However, the Government is now saying that this is not in line with the original policy intention and they plan to change the legislation to ensure this type of parking is excluded from the definition of commercial parking station and thus does not trigger any FBT for nearby employers – effective from 1 April 2022. Again, this legislation will not be enacted prior to the Federal election, so we encourage employers to be on top of the situation near all their business locations. We can assist clients to obtain a low cost report regarding whether there are any car parks charging more than the threshold rate within one kilometre and, if so, to minimise the value for any car parking benefits that may ultimately be subject to FBT.