Club Membership - tax?

[bambbbam2]

I seem to remember that it may be possible to salary sacrifice Airline Club membership?

Obv. we can't give financial advice here, just wondered if there is a link to any ATO articles on this?

Thanks

 

[Travel Guru]

I can't help you with a link or article, but you can, i always sal. sacrificed my QC membership, and despite being in the travel industry, i'm under the impression it isn't isolated to the industry.

TG

 

[futaris]

Just need to figure out how to use Google correctly:

Airline lounge fees site:ato.gov.au

or

Airport lounge membership site:ato.gov.au

Third link points to:

ATO ID 2002/957 - Deductions and expenses: airport lounge membership

 

[Travel Guru]

Just need to figure out how to use Google correctly:

Not sure that was necessary....

TG

 

[NM]

Just what can be salary sacrificed is determined by your employer, not by the ATO. The ATO determines what things that are provided to you by your employer (such as a paid airline club membership) are exempt from incurring Fringe Benefits Tax. You employer is only concerned with the FBT liability, since they have to pay it. Your employer has no concern as to what may incur a personal income tax liability.

It is my understanding (and I am not about to go and find the ruling) that the ATO has determined that airline club memberships paid by an employer do not incur FBT liability. This is the reason that some employers will allow their employees to salary sacrifice such memberships.

You need to consult with your employer to see if they will permit you to salary sacrifice the membership. My employer does permit Qantas Club membership to be salary sacrificed.

 

[rwatts]

It is my understanding (and I am not about to go and find the ruling) that the ATO has determined that airline club memberships paid by an employer do not incur FBT liability. This is the reason that some employers will allow their employees to salary sacrifice such memberships.

My employer (large federal govt department) only allows benefits with concessional tax treatments to be salary-sacrificed. Airline lounge membership - at a very good corporate rate - is certainly one that I include in my packaging (albeit currently on hold due to gold QFF status).

Some industries (eg health ?) do have a wider range of benefits with concessional tax treatments however. Also, there are changes to FBT on salary sacrificing contained in the recent budget.

Richard.

 

[bambbbam2]

Also, there are changes to FBT on salary sacrificing contained in the recent budget..

Yes I know.. laptops seem to be targeted, Long discussions over at whirlpool over this..

 

[vitaminp]

It is my understanding (and I am not about to go and find the ruling) that the ATO has determined that airline club memberships paid by an employer do not incur FBT liability.

This may show I have to much time on my hands, but I went searching for the reference. It appears to be contained in the Fringe Benefits Tax Assessment Act 1986.

"58Y(1) [Exempt benefits]

Either of the following benefits provided by an employer to an employee of the employer in respect of the employee's employment is an exempt benefit:


(a) an expense payment benefit where the recipients expenditure is in respect of an eligible membership or subscription;

(b) a property benefit where the recipients property is an eligible membership or subscription.
58Y(2) [Eligible membership or subscription]

Each of the following is an eligible membership or subscription:

(c) an entitlement to use an airport lounge membership."

As bambbbam2 said, laptops seemed to be targeted in the Budget papers, but we are trying to figure out if "certain work-related items" will also include lounge memberships.

 

[Dave Noble]

Yes I know.. laptops seem to be targeted, Long discussions over at whirlpool over this..

In what way do laptops seem to be targetted?

Dave

 

[vitaminp]

This from Budget Paper No. 2 - Part 1: Revenue Measures

"The Government will tighten the current fringe benefit tax (FBT) exemption for certain work‑related items (including laptop computers, personal digital assistants and tools of trade) by ensuring the exemption only applies where these items are used primarily for work purposes."

full link: Budget Measures 2008-09 - Budget Paper No. 2 - Part 1: Revenue Measures - Treasury

Trying to remove the benefit gained by people salary sacrificing laptops with no work related purpose.

 

[Dave Noble]

This from Budget Paper No. 2 - Part 1: Revenue Measures

"The Government will tighten the current fringe benefit tax (FBT) exemption for certain work‑related items (including laptop computers, personal digital assistants and tools of trade) by ensuring the exemption only applies where these items are used primarily for work purposes."

full link: Budget Measures 2008-09 - Budget Paper No. 2 - Part 1: Revenue Measures - Treasury

Trying to remove the benefit gained by people salary sacrificing laptops with no work related purpose.

Ah; fair enough. Always thought it was bizarre that they allowed it anyway

Dave

 

[simongr]

All that salary sacrificing does is give people an immediate write off for tax purposes rather than depreciating it over a number of years.

I too found it a weird benefit as all my employers have provided laptops (for the last 12 years at least) so I would get a better benefit from a desktop sacrifice as I would use that at home to work from home.

Sadly it is another example of the govt taking money from an easy target. I don't recall those changes being in the election promises..

 

[vitaminp]

All that salary sacrificing does is give people an immediate write off for tax purposes rather than depreciating it over a number of years.

Ahh...but the truly excellent aspect of the old rules was the ability to get the immediate benefit of the item from pre-tax dollars, and then claiming a depreciation deduction over the next three years! Which has now ended

 

[Cynicor]

As my understanding of tax law is minimal, does this change mean that I should purchase/salary sacrifice a computer now or is it already too late?

Thanks,
Jon

 

[simongr]

I believe it is too late unless you have already purchased the item.

 

[NM]

As my understanding of tax law is minimal, does this change mean that I should purchase/salary sacrifice a computer now or is it already too late?

Thanks,
Jon

Too late. Would need to have a receipt from prior to 7:30pm on Tuesday for a successful avoidance of FBT.

 

[bambbbam2]

but how are they going to know whether it is for "primarily work-related purposes'?

 

[simongr]

Like all things you essentially make a stat dec when you do our tax return attesting to the ttruth and accuracy - you can choose to play fast and loose and gamble on whether you get an audit. Given the current climate I think St Rudd will have directed the ATO to focus their audits on the >$150K band as that will win more smiles from the [formerly] Howards Battlers.

 

[straitman]

Too late. Would need to have a receipt from prior to 7:30pm on Tuesday for a successful avoidance of FBT.

My company actually put out a memo today advising that salary sacrifice claims were not to be approved for purchases after 7:30pm on Tuesday until information has been received from the Tax Department regarding the way forward. ie At this point they have nothing to work with.

 

[oz_mark]

My company actually put out a memo today advising that salary sacrifice claims were not to be approved for purchases after 7:30pm on Tuesday until information has been received from the Tax Department regarding the way forward. ie At this point they have nothing to work with.

Yep, I got an email along these lines from my employer as well. Basically our program is suspended awaiting further info.