01/02/2017

1

Car Parking Benefits

By: G.A.V.IN

All of the following are satisfied:The car is parked at premises owned, leased by, or under control of employer.The car is parked for a total of more than 4 hours between 7am and 7pm on any day.The car is owned by, leased to, or under control of an employee, or is provided by employer.The parking is provided in respect of the employee’s employment.The car is parked at or near the employee’s primary place of employment.The car is used by the employee to travel between home and work (or work and home) at least once on that day.There is a commercial parking station that charges a fee for all-day parking within a 1km radius of the premises on which the car is parked and

The fee for all day parking is more than thresholdAt start of FBT year, the commercial parking station fee for all day parking was more than threshold.

01/02/2017

2

Motor vehicle is not a car:

Parking provided to motor cycle or bicycle is exempt.

Parking provided to a non-car (over 1 tonne) is exempt.

Parking provided to an exempt car – is subject to FBT.

Exemption applies to certain employers:

Non-profit scientific institution;

Religious institution;

Charitable institution;

Public educational institution.

Car parking space dedicated for use by disabled persons is exempt –where the person holds official disabled parking permit.

Parking dedicated for visitors is not subject to FBT.

IF you are a small business employer, car parking benefits provided are exempt if:

The parking is not provided in a commercial car park; and

Employer is not a government body, listed public company, or subsidiary of listed public company.

A small business employer is one that – last income year, before the relevant FBT year, total income for the year was less than $10 million.

01/02/2017

3

The car is parked at premises that are owned, leased, or otherwise under control of employer:

Employer owns facilities

Employer leases parking facilities

Employer has access to parking facilities

Whether on or off the employer’s premises.

Car is parked for a total aggregate period of more than 4 hours between 7am to 7pm on any day.

Car is owned by, leased to, or under control of an employee, or is provided by employer.

The parking is provided in respect of the employee’s employment.

The car is used by the employee to travel between home and work (or work and home) at least once on that day. (at least a 1 way trip is required to satisfy this test.)

01/02/2017

4

The car is parked at or near the employee’s primary place of employment.

There is a commercial parking station that charges a fee for all-day parking within a 1km radius of the premises on which the car is parked.

The 1 km radius is measured by:

Shortest practicable route by foot, car, boat etc.

Measured from car entry point of the business premises / parking facility to the car entry point of the commercial parking station.

A commercial parking station is not one that included:

A station that charges “penalty rates’ for

Short term shoppers

Hotel guests

A car park for special functions (setup for specific event and charges excessive rate)

Kerb side parking meters (even though may be able to purchase 4 hour voucher).

01/02/2017

5

The fringe benefit is calculated by multiplying the number of benefits by the value of the benefit.

There are 3 ways to calculate the number of car parking benefits:

Actual method

Statutory formula method

12 week register method

01/02/2017

6

Need to keep comprehensive records on actual number of benefits provided on each & every day during the year, need to show how long car is parked in bay during day.

May be beneficial when very few car parking benefits provided to employees during the year (where they remain unused a lot).

May result in single car parking bay being counted as 2 separate benefits during any given day.

Minimal keeping required using this method.

Employer assumes that they have provided 228 parking benefits per year per space to their employee. (Pro-rata for partial year).

Number of spaces provided to employees x 228

01/02/2017

7

Keep accurate records (just like actual method) for 12 continuous weeks to determine number of benefits.

Number of benefits provided in 12 week period x 52/12.

Register is valid for current FBT year & next 4 years.

There are 3 ways to calculate the value of a car parking benefit:

Commercial parking station method.

Average cost method.

Market Valuation method.

01/02/2017

8

The value of the benefit is determined by identifying the lowest commercial daily rate within a 1km radius on each day that a benefit is provided.

The value of the benefit is determined by average the lowest commercial daily rate - at start of FBT year (1 April) - and the lowest commercial daily rate – at end of FBT year (31 March) within a 1 km radius.

Must be representative of the whole year (anti avoidance provision)

01/02/2017

9

The value of each employer provided space is determined annually be suitably qualified valuer.

The valuation is made before the “declaration date” (ie. date of lodgement of FBT return)

Is beneficial if the employer provided parking is of substandard quality (gravel car park vs. under cover parking in commercial parking station)

Often used where parking is at or near an airport.