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FBT payable on Uber


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#1 JRA

Posted 08 July 2019 - 11:52 AM

Now this  is interesting. So if you are using Uber for work, not a taxi, you/the company will need to pay FBT on the Uber.

How much will this change things I wonder?

#2 SplashingRainbows

Posted 08 July 2019 - 12:04 PM

A little misleading JRA (noted likely unintentional).

This only relates to a specific exemption allowed under the FBT act for home to work or work to home taxi travel. I am quite sure Uber used for ‘otherwise deductible’ travel such as a conference or CPD is no different to a bus, plane, taxi, private car or other more of transport which is exempt from FBT as it is otherwise deductible to the employee.

If an organization is big enough to be using this exemption, they’re big enough to get it right.

Edited by SplashingRainbows, 08 July 2019 - 12:04 PM.


#3 born.a.girl

Posted 08 July 2019 - 12:19 PM

Interesting to hear the specifics of this.

As a donation to their NFP organisation, I drove my neighbour to the airport on the weekend saving them $100, and they get some match up donations for 'in kind' contributions.

I didn't get around to asking why she'd been planning a taxi, when they've always used Uber to save about $40.

Then I saw the headline this morning but got no further.


So the act specifically says 'taxi' for home to work, and that's the issue?

ETA: And of course there are different rules for NFP, so no idea how that affects this.

Edited by born.a.girl, 08 July 2019 - 12:43 PM.


#4 ~LemonMyrtle~

Posted 08 July 2019 - 12:47 PM


I thought FBT was a thing of the past anyway, along with company cars and expensive restaurant meals and car phones. DH and I certainly don’t get any fringe benefits. Just a salary, plain and simple. If DH needs an Uber to get to a work thing, he either charges the company credit card, or he gets reimbursed next pay cycle. So it’s not even tax deductible, because we never pay.

#5 Nasty Poobah

Posted 08 July 2019 - 01:13 PM

View Post~LemonMyrtle~, on 08 July 2019 - 12:47 PM, said:

I thought FBT was a thing of the past anyway, along with company cars and expensive restaurant meals and car phones. DH and I certainly don’t get any fringe benefits. Just a salary, plain and simple. If DH needs an Uber to get to a work thing, he either charges the company credit card, or he gets reimbursed next pay cycle. So it’s not even tax deductible, because we never pay.

Yes, but if he used the company credit card for a purpose that attracted FBT (such as a long boozy lunch) then the company would still be required to pay fbt on the benefit he had been given.

Which is, I assume, the issue being raised here about Uber. If he uses an Uber rather than a taxi in certain circumstances it apparently currently attracts fbt because of the wording in the Act. So your DH's company would be paying fbt on that Uber company credit card transaction.

Which is nuts really because it's the purpose of the activity that's the crux of whether something attracts fbt and taxing a company for doing something in a cheaper fashion where there's no demonstrable difference in the service provided suggests the Act needs updating.

Edited for clarity (hopefully!)

Edited by Nasty Poobah, 08 July 2019 - 01:15 PM.


#6 JRA

Posted 08 July 2019 - 01:35 PM

Quote

This only relates to a specific exemption allowed under the FBT act for home to work or work to home taxi travel

Thanks, I didn't get that subtlety out of the article, thanks for the clarification.


Quote


I thought FBT was a thing of the past anyway, along with company cars and expensive restaurant meals and car phones.


God no. There are things that people still do that attracts FBT. And that is why accounting for corporate expenses still requires care.

Edited by JRA, 08 July 2019 - 01:36 PM.


#7 JRA

Posted 08 July 2019 - 01:38 PM

Quote

If DH needs an Uber to get to a work thing, he either charges the company credit card, or he gets reimbursed next pay cycle. So it’s not even tax deductible, because we never pay.



You are missing it. It is a tax deductible expense for his employer.

Now the question is whether they have to pay FBT on that if he catches an uber instead of a taxi.

#8 JRA

Posted 08 July 2019 - 01:40 PM

..

Edited by JRA, 08 July 2019 - 01:48 PM.


#9 ~LemonMyrtle~

Posted 08 July 2019 - 02:56 PM

View PostJRA, on 08 July 2019 - 01:38 PM, said:





You are missing it. It is a tax deductible expense for his employer.

Now the question is whether they have to pay FBT on that if he catches an uber instead of a taxi.

Is it a fringe benefit benefit though, if the travel is for work purposes? So no personal benefit at all.  I always assumed FBT was just for anything that benefits the employee, and would otherwise be extra salary. Like a work car, movie tickets, gym membership. Not catching a taxi to the airport to catch a flight to Sydney for a work meeting then coming directly home.

His company may be deducting it as the cost of doing business, but I can’t see how that would come under FBT.

I think the uber ruling is associated with people getting a “free” ride to work in the morning on the company dollar. That is equivalent to extra salary, and a personal benefit.

#10 JBH

Posted 08 July 2019 - 03:04 PM

View Post~LemonMyrtle~, on 08 July 2019 - 02:56 PM, said:



Is it a fringe benefit benefit though, if the travel is for work purposes? So no personal benefit at all.  I always assumed FBT was just for anything that benefits the employee, and would otherwise be extra salary. Like a work car, movie tickets, gym membership. Not catching a taxi to the airport to catch a flight to Sydney for a work meeting then coming directly home.

His company may be deducting it as the cost of doing business, but I can’t see how that would come under FBT.

I think the uber ruling is associated with people getting a “free” ride to work in the morning on the company dollar. That is equivalent to extra salary, and a personal benefit.

This is actually the point. There are tax deductible expenses and non-tax deductible expenses (I mean for an employer, not an employee). Generally, those that are tax deductible don’t attract FBT and those that aren’t tax deductible do attract FBT. Strictly business related expenses will fall into the first category, like travel to a client’s office. Those that provide a benefit to an employee call into the second category, like a long lunch. However, there is a specific exception to say that paying for an employee to catch a taxi home will not attract FBT. The legislation specifically says taxi, so an Uber doesn’t have the benefit of the exception.

#11 IamOzgirl

Posted 14 July 2019 - 11:20 PM

My work have parking spots for senior ex's. Those entitled to a parking space who don't have one are entitled to catch a taxi to and from work instead of this parking 'perk'.

I think that is exactly the FBT example that the ATO office is trying to exclude uber's from.

#12 Coffeegirl

Posted 15 July 2019 - 03:42 AM

If I understood it right.

Uber to airport for work conference - no fbt
Uber to work because hour work covers your travel to/from as part of your salary - fbt
Uber to work because you have an after work function and can’t drive - fbt

The third is one my husbands company will cop now.  They have always covered the senior team for taxi/Uber to/from work, if they were attending a function that they would be drinking at.

#13 born.a.girl

Posted 15 July 2019 - 05:42 AM

View PostIamOzgirl, on 14 July 2019 - 11:20 PM, said:

My work have parking spots for senior ex's. Those entitled to a parking space who don't have one are entitled to catch a taxi to and from work instead of this parking 'perk'.

I think that is exactly the FBT example that the ATO office is trying to exclude uber's from.


My understanding is the ATO is not trying to do anything except stick to the legislation, which came about long before there was any alternative to a 'taxi', and therefore 'taxi' is the world that's used, not 'paid transport '.

Taxis to work would be subject to fbt.

#14 SplashingRainbows

Posted 15 July 2019 - 07:14 AM

Taxis to work are not subject to FBT born.a.girl. That is the FBT exemption. To work or home from work.

Uber’s are not covered by that exemption.

#15 born.a.girl

Posted 15 July 2019 - 08:47 AM

View PostSplashingRainbows, on 15 July 2019 - 07:14 AM, said:

Taxis to work are not subject to FBT born.a.girl. That is the FBT exemption. To work or home from work.

Uber’s are not covered by that exemption.


Ah, o.k. ta - good thing I've got you here to clarify my ageing brain's misfirings. :)   I think I'm getting mixed up with ancient awards which only allowed for an entitlement to a taxi home if you worked x amount of overtime, and it finished after x hours.



What about trips to the airport for work?  Is that being caught by the 'taxi' specific legislation too?

And what about NFP exemptions to fbt rules?  Still curious as to why my neighbour changed from uber to taxis for airport trips.  May be a complete coincidence of course, but can't ask her till next week.

#16 SplashingRainbows

Posted 15 July 2019 - 09:55 AM

No. Any form of transport to airport for work would meet the ‘otherwise deductible’ rule. No fbt.

Exempt benefits don’t count towards any FBT caps or limits. Taxable benefits do.
NFPs are not protected from this change. If they used an Uber instead of a taxi it would count towards the limit allowed for the employee.

Organizations can, and do, frequently implement policies for reasons other than tax. Maybe they were concerned people may use friends or family Uber’s and this wouldn’t pass the smell test for a NFP. Or a taxi org may have given them preferential pricing. Who knows.

#17 Chaotic Pogo

Posted 15 July 2019 - 09:06 PM

Most likely they read the same confused articles that were published as if no Uber ride is FBT exempt and mistakenly thought the NFP would start having to pay FBT.
Just the thought of accounting for FBT gives me the colliwobbles. What a headache.

#18 born.a.girl

Posted 16 July 2019 - 08:05 AM

View PostChaotic Pogo, on 15 July 2019 - 09:06 PM, said:

Most likely they read the same confused articles that were published as if no Uber ride is FBT exempt and mistakenly thought the NFP would start having to pay FBT.
Just the thought of accounting for FBT gives me the colliwobbles. What a headache.


I will find out on the weekend and come back to post.

The information junkie in me needs to know!




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