Fringe Benefits Tax Amendment Regulations 2001 (No. 2) 2001 No. 188
EXPLANATORY STATEMENT
STATUTORY RULES 2001 No. 188
Issued by the Authority of the Assistant Treasurer
Fringe Benefits Tax Assessment Act 1986
Fringe Benefits Tax Amendment Regulations 2001 (No. 2)
Section 135 of the Fringe Benefits Tax Assessment Act 1986 (the Act) provides that the Governor-General may make regulations for giving effect to the Act.
The proposed Regulations amend the Fringe Benefits Tax Regulations 1992 (the Regulations) to exclude travel between home and work in an unmarked police vehicle from having to be reported on an employee's payment summary.
Employers are required to report fringe benefit amounts of more than $1,000 on their employees' payment summaries. However, for equity and compliance cost reasons, subsection 5E(3) of the Act identifies certain fringe benefits that do not need to be reported. These benefits are referred to as 'excluded fringe benefits'. Paragraph 5E(3)(i) of the Act provides that certain fringe benefits may be excluded by way of regulation. The Regulations currently exclude a number of benefits from fringe benefits tax (FBT) reporting, such as car fringe benefits arising from travel between home and work in a marked emergency vehicle (Subregulation 3B(5A)).
In accordance with the Government's decision, the Regulations are amended to prescribe, as excluded fringe benefits, benefits which arise from a police officer's use of an unmarked police vehicle between home and a place where their duties of employment are performed. New Subregulation 3B(4A) describes- an unmarked police vehicle as a car that is used by the police service, and taken home by a police officer to enable the officer to respond to events of crime and public safety. The vehicle must be fitted with a police radio and concealed or portable warning lights and sirens.
As a result, these benefits will not be taken into account when determining an individual's liability for certain tax surcharges or other obligations, or eligibility for certain government payments and concessions.
The proposed Regulations apply to benefits provided from 1 April 2000. Therefore, benefits arising from an employee's travel in an unmarked police vehicle between home and place where duties of employment are performed will not be reported in payment summaries issued for the year of income ended 30 June 2001 and later years.
As the proposed Regulations remove the obligation to report these fringe benefits, they benefit police force employees and do not contravene subsection 48(2) of the Acts Interpretation Act 1901. Subsection 48(2) prohibits the retrospective operation of regulations which adversely affect the rights of, or impose liabilities upon, a person.
Overview
The Fringe Benefits Tax Amendment Regulations 2001 (No. 2) were enacted to address a specific gap in the Fringe Benefits Tax Assessment Act 1986. This legislation was developed to provide relief for police officers by excluding travel between home and work in an unmarked police vehicle from the requirement to be reported on an employee's payment summary. The problem it sought to resolve was the administrative burden and equity issues arising from the current FBT reporting requirements, which were seen as disproportionately affecting police officers who use unmarked vehicles for their duty commutes. The policy objective of these regulations was to reduce compliance costs for employers while ensuring that police officers could continue to use unmarked police vehicles for commuting without incurring unnecessary tax liabilities. The regulations were issued by the authority of the Assistant Treasurer, amending the Fringe Benefits Tax Regulations 1992 to include the new exclusion for travel in unmarked police vehicles.
Scope and Application
The Fringe Benefits Tax Amendment Regulations 2001 (No. 2) amend the Fringe Benefits Tax Regulations 1992 to exclude from reporting on an employee's payment summary certain fringe benefits arising from travel between home and work in an unmarked police vehicle. This exclusion applies to benefits provided from 1 April 2000, meaning that such benefits will not be reported in payment summaries issued for the year of income ended 30 June 2001 and subsequent years. The Act applies to police officers who use an unmarked police vehicle for commuting purposes, defined as a car used by the police service, taken home by a police officer, equipped with a police radio, and fitted with concealed or portable warning lights and sirens. By excluding these benefits, the Regulations aim to reduce compliance costs and improve equity without affecting the rights or imposing liabilities upon individuals, in accordance with the Acts Interpretation Act 1901. This amendment ensures that these specific fringe benefits are not considered when determining an individual's liability for certain tax surcharges or eligibility for government payments and concessions.
Key Provisions
The Fringe Benefits Tax Amendment Regulations 2001 (No. 2) modify the Fringe Benefits Tax Regulations 1992 to exclude travel between home and work in an unmarked police vehicle from being reported on an employee's payment summary (Subregulation 3B(4A)). Under Section 135 of the Fringe Benefits Tax Assessment Act 1986, the Governor-General has the authority to enact these regulations to give effect to the Act. Currently, travel between home and work in a marked emergency vehicle is already excluded from FBT reporting (Subregulation 3B(5A)). The amendments extend this exclusion to unmarked police vehicles, which are defined as cars used by the police service and taken home by a police officer to respond to crime and public safety events, provided they are equipped with a police radio and concealed or portable warning lights and sirens.
The Regulations impose specific obligations on employers to report fringe benefits exceeding $1,000 on their employees' payment summaries, as stipulated in subsection 5E(3) of the Act. However, certain fringe benefits are excluded from this reporting requirement, referred to as 'excluded fringe benefits'. The newly added Subregulation 3B(4A) identifies travel in an unmarked police vehicle as an excluded fringe benefit. This means that such travel does not need to be reported on payment summaries, thus relieving employers of this reporting obligation for police officers.
Failure to comply with the requirements set out in these Regulations could result in civil or criminal consequences. However, the Explanatory Statement does not specify any particular offences, penalties, or consequences for non-compliance with these amendments. It is essential to note that the Regulations do not operate retrospectively and therefore do not adversely affect the rights of, or impose liabilities upon, a person, in accordance with subsection 48(2) of the Acts Interpretation Act 1901. The proposed Regulations apply to benefits provided from 1 April 2000, which means that travel in an unmarked police vehicle between home and the place of employment will not be reported in payment summaries issued for the year of income ended 30 June 2001 and later years.