One mid-tier firm is calling for a clearer position from the Tax Office on certain working arrangements, to ensure adequate preparation time and avoid significant tax consequences for clients.
Mid-tier fears confusion with looming ATO ruling
The ATO is set to release a draft ruling on the income tax treatment of travel expenses and related fringe benefits tax (FBT) issues next week.
BDO noted that the release of the draft ruling has been delayed by the ATO several times, and said the final ruling should ideally be released before the end of the FBT year on 31 March, or shortly afterwards, to allow consideration before the FBT return lodgement due date in May.
The firm believes previous attempts to consolidate existing rulings on travel expenses have resulted in a limited consultation period regarding the deductibility of typical travel arrangements.
Given the high number of fly-in, fly-out workers and the onset of global mobility, as well as the tightening of the living away from home allowance, the correct application of travel rules have become significantly more pertinent than in previous years.
Further, BDO tax partner Adele Townsend believes that, in regard to business travel and FBT, the taxation rules have not kept up with changes in employment conditions, including the ever-increasing mobile workforce.
“We hope the draft ruling will result in a more rational approach to travel expenses, compared to the often contradictory approach in some of the existing rulings on this topic,” said Ms Townsend.
“The ATO also needs to clarify its position on the difference between travelling for work and living away from home in a way that recognises the mobility that is now required in today’s business environment, as evidenced in the recent John Holland tax case before the Federal Court,” she said.
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