Changes to FBT on car parking

Taxation Ruling TR2021/2 Fringe Benefits tax: car parking benefits was updated to provide that from 1 April 2022 car parking facilities that charge penalty rates higher than commercial rates are now considered to be commercial parking stations for FBT purposes.

The change is significant because historically employers have been able to exclude car parking benefits from FBT where the only car parking facilities within a one-kilometre radius of a work car park were special purpose car parks i.e they offered a low or free rate, then a penalty rate to discourage all day parking (such as suburban shopping centres, universities, or hospitals). However, these car parks are no longer excluded from the definition of a commercial parking station and now must be considered for the purposes of assessing and calculating FBT.

The car parking threshold for the FBT year ending 31 March 2023 is $9.72

Small businesses are exempt from paying FBT on car parking benefits if all the following conditions are met:

• The parking is not provided in a commercial car park.
• For the last income year ending before the start of the relevant FBT year, the business’s gross total income was less than $10 million or aggregated turnover was less than $50 million.

Please speak with us if you have any queries on FBT so that we can assist you in determining if you have any liability.