The Tax Institute welcomes the opportunity to make a submission to the Treasury in relation to the Treasury Laws Amendment (Measures for consultation) Bill 2022: FBT record keeping exposure draft legislation and accompanying explanatory material in relation to modifying existing FBT record keeping obligations. This submission contains comments in relation to the travel diary and relocation transport legislative instruments, and the travel diary and relocation transport explanatory statements (the explanatory statements).
In the development of this submission, we have closely consulted with our National Fringe Benefits Tax & Employment Taxes Technical Committee to prepare a considered response which represents the views of the broader membership of The Tax Institute.
The Tax Institute broadly supports the policy intent to reduce and simplify fringe benefit tax (FBT) record keeping requirements, by allowing employers to rely on adequate alternative records. The delegation to the Commissioner of the power to determine appropriate record keeping, rather than codifying requirements through the legislative process, will mean that record keeping requirements can be addressed in a more timely and appropriate manner, particularly in an evolving environment. The success of the measures will ultimately depend on the Commissioner taking a reasonable, timely and practical approach to his delegated authority.
The Tax Institute has two specific observations in respect of the explanatory statements. First, in our view the relief proposed for travel diaries and relocation transport employee declarations, appear to provide minimal practical benefits and accordingly do not entirely achieve the policy intent of the measure. We consider that for employers to appreciably benefit from this measure, more information and examples should be published in the explanatory statements to enable taxpayers and practitioners to fully understand the scope.
Secondly, existing FBT record keeping obligations require businesses to navigate a jungle of ‘red tape’. The proposed relief is a welcome but small step towards reducing and simplifying compliance costs for employers in this regard. For greater impact, we consider that the approach could be expanded to encompass other FBT declarations. For example, living away from home allowance (LAFHA) declarations, declarations relating to the otherwise deductible rule, ‘no private use declarations’ and car log books. Allowing employers to rely on alternative records for commonly used declarations would provide widespread relief for many businesses and improve the effectiveness of the policy.