09 May FBT car parking benefit changes delayed
The long-awaited final ruling in relation to FBT car parking fringe benefits has been delayed until at least mid-2020. With this date being so close to the original proposed implementation date in the draft ruling (Draft TR 2019/D5), the ATO has decided that any changes in the view will only apply from 1 April 2021. This will give employers sufficient time to implement what could be significant changes.
Draft TR 2019/D5 was issued in November 2019 in response to two Full Federal Court decisions – Virgin Blue Airlines Pty Ltd v FCT  FCAFC 137 and FCT v Qantas Airways Ltd  FCAFC 168. The Qantas case, which the ATO won, focused on the meaning of the word “public” in relation to commercial parking stations. The Full Court decided that the word “public” should be given its ordinary meaning and that car parks with restrictions on who could use them could still be public car parks. In doing so, it also distinguished the case from Virgin Blue.
Following on from the decision, the ATO withdrew TR 96/26 which expressed its previous view that a car parking facility did not qualify as a commercial car parking station if it had a primary purpose other than providing all day parking by charging penalty rates significantly higher than the rates chargeable for all day parking at commercial all-day parking facilities. It then issued Draft TR 2019/D5 outlining its new view on what constitutes a commercial parking station.
According to the ATO, a commercial parking station is a permanent commercial car parking facility that makes all-day parking (including just one car parking space) available to the public for a fee and does this in the ordinary course of business. What constitutes ordinary course of business depends on the business being carried on and whether the offer of all-day parking is a usual or regular part of business activities, even if it is not the sole business activity.
In addition, the ATO notes that if a car park allows all-day parking, but its fee structure discourages it with higher fees (eg hospital or shopping centre), the car park can still be considered a commercial parking station if it satisfies other requirements.
Since the publication of Draft TR 2019/D5 and the subsequent changes in Draft Chapter 16 of FBT – a guide for employers, the ATO said it received a significant number of submissions including feedback on its changed view for car parking stations that charge penalty rates to discourage all-day parking. It said it is currently working through the submissions and the potential impact of this changed view on employers.