Employers hit with FBT on Uber services

A recent ATO guidance statement has clarified that employers providing travel benefits to employees could be subject to FBT if such services are provided via a ride-sourcing organisation such as Uber, instead of a registered taxi service.
Section 58Z of the FBT Assessment Act 1986 (FBTAA) provides employers with an exemption for taxi travel between home and work and in the case of illness, where certain conditions are met. Unfortunately under the FBT law, this concession applies only to a taxi service as defined in the FBT Act, which defines a “taxi” as a vehicle that is licensed to operate as a taxi. While some employers will be able to rely on the exemption available for minor and infrequent benefits for private home/work travel, regular providers of such benefits may struggle to fall within the ambit of the exemption. Having identified that a ride-sourcing service is likely to carry an FBT burden, many employers will opt for the traditional taxi service to avoid the FBT sting. Travel to business meetings, the airport, etc. for business-related purposes will continue to be FBT free regardless of the carriage service used. Give us a call if you wish to discuss this.

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