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FBT & Car Parking – Savings, Concessions & Some Tips to Consider

FBT & Car Parking – Savings, Concessions & Some Tips to Consider

Under the FBT legislation, the provision of car parking by the employer to employees can be taxed in a variety of ways. This is primarily due to the diversity in which an employer is able to provide a “parking” benefit. Secondary to this is the complexity of the FBT law, which can naturally lead to confusion, misunderstandings and errors.

With the 2013 FBT year end just around the corner on 31 March, park yourself up for a few minutes and we will share some thoughts ….

Exempt car parking or car parking not subject to FBT

Car parking can be exempt or not subject to FBT for a number of reasons, including:

  • There is no commercial parking station (CPS) within a 1 kilometre radius of the premises where the employer provides the car parking that charges more than the daily threshold amount as its lowest fee for a full day of parking on the first day of the FBT year – that’s a mouthful. The threshold is adjusted each year. For the FBT year ended 31 March 2013 the threshold amount is $7.83 per day (2012 $7.71).
  • There is no CPS within a 1 kilometre radius. FULL STOP
  • When the employee parks their car in the employer provided car parking space for a 24 hour midnight to midnight period. This is often the case where an employee is travelling.
  • When the car is parked in the car parking space for less than 4 hours in total between 7am and 7pm. This could arise in respect of an employee in a sales role who is on the road most of the time or a shift worker who starts work late in the afternoon or finishes early in the morning.
  • When the parking fee is provided (reimbursed) in respect of business travel. The key here is being sure that the car parking fee has been incurred whilst on business travel.

It’s important to check on your businesses particular circumstances, locations, car parking policy and reimbursement policy, to see if the above exemptions and reductions may apply.

Fully taxable car parking

This is the one to avoid! Can result in a nasty FBT bill and a reportable fringe benefit for the employee!

Often arises (unknowingly) due to employee’s sourcing their own car space agreement and then entering into arrangement whereby the employer reimburses the employee monthly for the monthly car parking lease fee.

Let me illustrate:

An employee leases a car space for the 2013 FBT year in their own name for $880 per month including GST. The employer reimburses the employee on a monthly basis.

The lowest CPS within a 1 kilometre charges an average daily rate of $12 including GST.

The FBT payable under the Statutory Formula Method (SFM) is $2,620. Car parking fringe benefits are not reportable on an employee’s 30 June 2013 payment summary.

However, and it’s a big however, as the employer provides the car parking by way of an expense payment reimbursement, then the benefit must be valued based on the amount reimbursed. So the above SFM calculation is not applicable and only useful in illustrating the resulting problem ….

The annual FBT payable on the monthly reimbursement of $880 is $10,139. Or a nasty $7,519 MORE TO PAY than under the SFM.

In addition, the employee will end up with an amount of $19,739 as a reportable fringe benefit on their 30 June 2013 payment summary.

Another situation that commonly arises where FBT is payable in full on car parking, is where an employer regularly reimburses an employee’s daily car parking fee. This may be an ongoing “policy” agreement between the employer and their employee/s due to a lack of car spaces in the employers premises or is often seen as being an equivalent cost to a taxi fare for employees who regularly are required to work late (in this case the taxi fares would be exempt from FBT).

However, where an employer regularly reimburses an employee’s daily car parking fee, then FBT will be payable in full on the total amount reimbursed. If the reimbursement is not so regular, then it may be possible to claim the minor benefit exemption. Although what’s regular and what’s irregular? We’ll park that story for another time!

Concessionally taxed car parking

This is where the fun starts! How low can you go? The lower the better = less FBT to pay! Why pay more FBT than you have to?

The Average Cost Method is easily the most common valuation method for concessionally taxed car parking. It is also the Method by which employers unknowingly (as is often the case), pay far more FBT than is required.

We illustrate below the significant savings employers can achieve using examples for 10, 20, 40 and 80 spaces, and average daily rates ranging from $18 down to $10. This potential reduction in average daily rates is indicative of what is achievable. A small reduction in the daily rate makes for a large FBT saving.

 

If you’ve got a sizeable FBT bill on your car parking or just think you’re paying way too much FBT on car parking – it’s time to take a closer look at the average daily rate and make sure that you’re not paying more FBT than required by the law.

Trends in car parking benefits:

Here are some of the trendy things happening with car parking:

Employee contribution method

More employers are allowing employees to make an after tax contribution to the provision of their car parking benefit. The works similar to novated lease arrangements

Cashing out

Cashing out the car parking benefit for salary and wages is certainly trendy but not necessarily popular. Cashing out can cause headaches for both the employees and the employer. From the employee perspective it can be challenging finding a cost effective long term parking solution. Whilst employers are usually motivated by reducing benefits to minimise administration, the cutting of car parking can lead to unhappy employees as they bring their car parking woes into the workplace.

The 12 week register method

The preparation of a 12 week car parking “logbook” register is often one way to reduce the FBT liability. This can be done on an employee by employee basis or more broadly. And like all FBT “logbooks”, once it’s completed, it remains valid for 5 years.

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If you’re involved in the year end FBT process and preparation or review of the FBT Returns – good luck. If your not involved, we hope the above gave you some useful insight into FBT & car parking.

Paul Mather

Director

FBT Solutions

paul.mather@fbtsolutions.com.au

www.carparkingfbtrates.com.au

www.fbtsolutions.com.au

 

 

Parking for Matilda Cruises

Matilda Cruises depart from the Aquarium Wharf, Pier 26 Darling Harbour, Sydney CBD.

It offers delicious Modern Australian cuisine and is open most nights.

There is parking surrounding the location, however simply choosing a random car park or hoping the best on the street parking available is not always the best idea.

Here’s a list of the closest car parks, they do quite often change pricing and even brands so we advise that you search and compare all the parking options each time before you go as the price variance can be up to $30 in many cases.

*The Observatory Hotel Sydney
*Wilson Parking Jones Bay Wharf Pyrmont
*Shangri-La Hotel Sydney,
*Wilson Parking Towns Place

For all of the parking options (discount, deals or just a cheap option), just visit www.carparking.info and it will show you pricing comparison (letting you compare between all of the surrounding car parks) and also distance from the restaurant. Also try the Cheap Parking app – it will show you the cheapest deals and even guide you there!

 

Parking for Hellenic Club

Heading out to Hellenic Club at 251 Elizabeth Street, Sydney CBD.

It offers Modern Australian cuisine and is open most nights.

Wondering where to park? And more importantly where there is a cheap place to park?

There are a number of car parks nearby and also some street parking available however spaces are limited and the rangers are usually pretty on the ball.

Here’s the closest car parks, however they all charge significantly different prices so it is best to search on carparking.info to choose the best one.

*Secure Parking Goulburn Street
*Rydges Hotel World Square Sydney
*Hilton Sydney Valet
*Secure Parking World Square

There may be discounts, deals or just a one off cheap option, just visit www.carparking.info and it will show you a custom pricing comparison specific to your stay (letting you compare between all of the surrounding car parks) and also distance from the restaurant. Also try the Cheap Parking app – it will show you the cheapest deals and even guide you there! That extra 2 minute walk might save you a main meal!!

Parking for GPO Oyster Bar

The GPO Oyster Bar is located at 1 Martin Place, Sydney CBD.

It offers Modern Australian cuisine and is open most nights.

There are a number of car parks nearby and also some street parking available however spaces are limited.

Here’s the closest car parks, however we advise that you search and compare all the parking options as the price variance is usually quite significant.

*Secure Parking No 1 Martin Place Pitt Street
*Wilson Parking Angel Place
*Secure Parking Pitt Street Sydney
*Wilson Parking MLC Centre

For all of the parking options (discount, deals or just a cheap option), just visit www.carparking.info and it will show you pricing comparison (letting you compare between all of the surrounding car parks) and also distance from the restaurant. Also try the Cheap Parking app – it will show you the cheapest deals and even guide you there!

 

Parking for James Squire

The James Squire – Sydney is located at 22 The Promenade, King St. Wharf, Sydney CBD.

It offers delicious Modern Australian cuisine and is open most nights.

There is parking surrounding the restaurant however simply choosing a random car park or hoping the best on the street parking available is not always the best idea.

Here’s a list of the closest car parks, they do quite often change pricing and even brands so we advise that you search and compare all the parking options each time before you go as the price variance can be up to $30 in many cases.

*Secure Parking King Street Wharf
*Sun Parking Westpac Place Kent Street
*Secure Parking 383 Kent Street Sydney
*Wilson Parking Allianz Building Market Street

For all of the parking options (discount, deals or just a cheap option), just visit www.carparking.info and it will show you pricing comparison (letting you compare between all of the surrounding car parks) and also distance from the restaurant. Also try the Cheap Parking app – it will show you the cheapest deals and even guide you there!

 

Parking for Jaipur Sweets

Going to dine at Jaipur Sweets. It’s located at 188 Elizabeth Street, Sydney CBD – both convenient and accessible.

It offers Indian cuisine and is open most nights.

So once the restaurant is chosen it is usually a case of working out where to park? And more importantly where there is a cheap place to park so we can actually afford to eat food at the restaurant?

You wouldn’t be wrong if you were worried about the cost of parking. There are a number of car parks nearby and also some street parking available. Given the nature of having a good night out – we would recommend you avoid the street parking option because overstay can often cost more than the dinner!

There are a number of close car parks however they all charge significantly different prices so it is best to search on carparking.info to choose the best one.

*Secure Parking Goulburn Street
*Secure Parking 4 Campbell Street Haymarket
*Sebel Surry Hills Sydney
*Rydges Hotel World Square Sydney

Also worth comparing discounts, deals or just a one off cheap option, just visit www.carparking.info and it will show you a custom pricing comparison specific to your stay (letting you compare between all of the surrounding car parks) and also distance from the restaurant.

In our experience, the cheap car park from last time usually isn’t anymore, and even worse, if you aren’t diligent you can often find yourself walking past a closer and cheaper car park on your way to the restaurant. Search, plan and save… and of course enjoy your night out!

Also try the Cheap Parking app – it will show you the cheapest deals and even guide you there!

Parking for The Malaya

The Malaya is located at 39 Lime Street, King Street Wharf, Sydney CBD.

It offers Malaysian & Seafood cuisine and is open most nights.

There are a number of car parks nearby and also some street parking available however spaces are limited.

Here’s the closest car parks, however we advise that you search and compare all the parking options as the price variance is usually quite significant.

*Secure Parking King Street Wharf
*Sun Parking Westpac Place Kent Street
*Secure Parking 383 Kent Street Sydney
*Plaza Parking The Grace Hotel Sydney

For all of the parking options (discount, deals or just a cheap option), just visit www.carparking.info and it will show you pricing comparison (letting you compare between all of the surrounding car parks) and also distance from the restaurant. Also try the Cheap Parking app – it will show you the cheapest deals and even guide you there!

Parking for Prime Restaurant

Going to dine at Prime Restaurant @ GPO. It’s located at Lower Ground Floor, No. 1 Martin Pl, Sydney CBD – both convenient and accessible.

So once the restaurant is chosen it is usually a case of working out where to park? And more importantly where there is a cheap place to park so we can actually afford to eat food at the restaurant?

You wouldn’t be wrong if you were worried about the cost of parking. There are a number of car parks nearby and also some street parking available. Given the nature of having a good night out – we would recommend you avoid the street parking option because overstay can often cost more than the dinner!

There are a number of close car parks however they all charge significantly different prices so it is best to search on carparking.info to choose the best one.

*Secure Parking 60 Elizabeth Street
*Wilson Parking MLC Centre
*Wilson Parking The Chifley Tower

Also worth comparing discounts, deals or just a one off cheap option, just visit www.carparking.info and it will show you a custom pricing comparison specific to your stay (letting you compare between all of the surrounding car parks) and also distance from the restaurant.

In our experience, the cheap car park from last time usually isn’t anymore, and even worse, if you aren’t diligent you can often find yourself walking past a closer and cheaper car park on your way to the restaurant. Search, plan and save… and of course enjoy your night out!

Also try the Cheap Parking app – it will show you the cheapest deals and even guide you there!

Parking for Beppi’s Restaurant

The Beppi’s Restaurant is located at 21 Yurong Street, Sydney CBD.

It offers delicious Italian cuisine and is open most nights.

There is parking surrounding the restaurant however simply choosing a random car park or hoping the best on the street parking available is not always the best idea.

Here’s a list of the closest car parks, they do quite often change pricing and even brands so we advise that you search and compare all the parking options each time before you go as the price variance can be up to $30 in many cases.

*Secure Parking Riley Street
*Secure Parking Boulevard William Street
*Enacon Parking Cathedral Street
*Interpark Domain Car Park

For all of the parking options (discount, deals or just a cheap option), just visit www.carparking.info and it will show you pricing comparison (letting you compare between all of the surrounding car parks) and also distance from the restaurant. Also try the Cheap Parking app – it will show you the cheapest deals and even guide you there!

 

Parking for B.B.Q King Restaurant

Heading out to B.B.Q King Restaurant at 18 Goulburn Street, Sydney CBD.

It offers Chinese cuisine and is open most nights.

Wondering where to park? And more importantly where there is a cheap place to park?

There are a number of car parks nearby and also some street parking available however spaces are limited and the rangers are usually pretty on the ball.

Here’s the closest car parks, however they all charge significantly different prices so it is best to search on carparking.info to choose the best one.

*Sussex Centre Car Park China Town Sydney
*Secure Parking World Square
*Secure Parking Number One Dixon Street
*Secure Parking 4 Campbell Street Haymarket

There may be discounts, deals or just a one off cheap option, just visit www.carparking.info and it will show you a custom pricing comparison specific to your stay (letting you compare between all of the surrounding car parks) and also distance from the restaurant. Also try the Cheap Parking app – it will show you the cheapest deals and even guide you there! That extra 2 minute walk might save you a main meal!!