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18 Nov 2015

Commissioner’s operational position on FBT and car parks

CIR's operational position on FBT and carparks following release of BR 15/11 and BR 15/12 which change the CIR's view regarding the 'on-premises' exemption.

Inland Revenue has released BR Pub 15/11 and BR Pub 15/12.  These rulings cover car parks an employer owns or leases and whether they will qualify for the “on-premises” exemption from FBT.  BR Pub 15/11 relates to car parks provided on premises that the employer owns or leases while BR Pub 15/12 relates to car parks provided on the premises of a company that is part of the same group of companies as an employer.

The rulings provide that the premises of an employer will not usually include a car park that an employer is merely licensed to use, unless the employer can show they have a right to use the car park that is in fact or effect substantially exclusive.

This is different from the Commissioner's previously published view on FBT and car parks in BR Pub 99/6.  That public ruling determined that licensed car parks could never be an employer's premises, and so the provision of licensed car parks by employers to employees was always subject to FBT.  BR Pub 99/6 expired in 2005, and since then the relevant legislation has changed. 

The Commissioner recognises that some taxpayers may have continued to adopt the approach in expired BR Pub 99/6 in relation to licenced car parks when determining their FBT liability. 

Accordingly, as Inland Revenue considers that the legal analysis contained in the public rulings BR Pub 15/11 and BR Pub 15/12 represents the correct view of the law, employers can ask Inland Revenue to apply the analysis in the public rulings to tax positions taken in earlier years.  The Commissioner will apply the principles set out in the Standard Practice Statement on s 113 of the Tax Administration Act 1994 to determine whether to amend past assessments subject to the statutory time limits for refunds (usually four years).

Every request made under s 113 will be considered by the Commissioner on a case by case basis taking into account all of the relevant individual circumstances of the employer and their parking arrangements.  Relevant supporting documents need to accompany any request.