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NZ Staff carpark costs likely to soar

Property Here - Monday, March 11, 2013

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Lobby group says planned perks tax changes will hit everyone from cleaners to merchant bankers.

Auckland and Wellington carpark costs will shoot up 50 per cent, a lobby group claims, if proposed changes to fringe benefit tax go through.

FBT Action Group, formed by industry and business groups, says the tax change proposed late last year is now before a select committee and involves extending the 50 per cent fringe benefit tax to all employer-provided carparks in the two city's CBDs.

The group - including from the Employers and Manufacturers Association Northern, Property Council and private carparking business Tournament Group - says it will hit everyone from night shift cleaners to merchant bankers yet will yield relatively little extra tax. It said workers faced a 50 per cent increase and businesses would pay an extra $1500 a year for all on-premises car parks, and close to $2400 a year for all commercially supplied car parks.

Late last year, Revenue Minister Peter Dunne said employee carparks would soon be recognised as income.

The tax was only aimed at workers with a designated parking space in the Auckland and Wellington CBDs, where the value of a parking space was high.

But Property Council chief executive Connal Townsend said it would hurt businesses and workers and would only capture an extra $17 million annually.

KPMG tax lawyer Murray Sarelius said the extra cost to companies was likely to be passed on to workers in the long term.

Changes were initially raised in the 2011 Budget which flagged taxing baches, planes, yachts and salary sacrifices like complimentary laptops, carparks, cars, medical insurance and company credit cards.

"The Government is reviewing the tax treatment of employee benefits paid in lieu of salary. Any changes are expected to result in an increase in tax revenues," the 2011 Budget said.

Unite Union national secretary Matt McCarten said, "While the tax seems to target the benefits of highly paid white collar workers, it also captures blue collar night workers who can least afford it."

Tournament managing director James Brown said trying to determine whether a carpark was for staff or customers, if it was for private or business use or even whether a worker was an employer or an employee was going to be a nightmare for Inland Revenue.