UpgradeMe pricing and success

[max85]

hey guys im wanting to upgrade my us trip in a few weeks but get this:

BNE - LAX - Min is $700
SYD - LAX - Min is $950

For Premium Eco from Q fair....

Seems crazy expensive

Thoughts?

 

[scubabe]

Nope, that's absolutely standard (BNE-LAX $700) and what we were quoted for "at check-in" upgrades on a recent US trip on VA.

Hmmmmm actually I think the LAX-BNE flight cost at the check-in counter was $899USD. WAY too expensive for an upgrade to PE in my mind so we declined both offers.

 

[max85]

yeah ive upgraded a few times at the gates which are always more expensive but online before i thought would be cheaper
reading other post some people have got upgraded for $550

 

[medhead]

It's certainly more comfortable than whY, but don't expect anything fabulous. It has most definitely been hit with the VA apathy virus!

I've checked the UpgradeMe rate for a flexi flight I have in 2 weeks time (CNS-BNE) and it is currently requiring a minimum bid of $150 (making a total including original fare of $435). Makes all those J sale fares I grabbed at $319 seem pretty good! I'm still a bit peeved at VA applying some unwritten blackout dates to that sale.....which is why I'm on a flexi in a couple of weeks!

With the VA apathy virus spreading rapidly, I have no idea who in their right minds would pay the full fare on that route of $599 (CNS-BNE) or $1040 (CNS-MEL)!
:shock:

Been offered a CNS-BNE upgrade bid for this weekend. Minimum is $180 from a Saver. Any data on success at the minimum bid level?

 

[clipped_wings]

Been offered a CNS-BNE upgrade bid for this weekend. Minimum is $180 from a Saver. Any data on success at the minimum bid level?

We've had success SYD-BNE and SYD-ADL with minimum bids. Once bid the minimum for an upgrade SYD-LAX from PE to J but missed out - it may have had a lot to do with our low status at that time.

 

[bigd]

Hi All,

I just put in a sucessful bid which was the min bid for $160 from ADL-PER from E-J this was from a cheap saver fair.

Was confirmed 72 hours before the flight.

Big D

 

[Deleted member 29185]

Been offered a CNS-BNE upgrade bid for this weekend. Minimum is $180 from a Saver. Any data on success at the minimum bid level?

I've never tried CNS-BNE TBH, however I never have trouble upgrading in the lounge and I've done that a number of times. There's nearly always spare J seats on the flight (although I'll add that I don't generally fly CNS-BNE during peak). I'm not a big UpgradeMe player and I have only done it once, which was successful and on the min. bid. (POM-BNE)

$180 on a saver sounds pretty good value. Was it a sale/promo saver, or full fare?

 

[medhead]

I've never tried CNS-BNE TBH, however I never have trouble upgrading in the lounge and I've done that a number of times. There's nearly always spare J seats on the flight (although I'll add that I don't generally fly CNS-BNE during peak). I'm not a big UpgradeMe player and I have only done it once, which was successful and on the min. bid. (POM-BNE)

$180 on a saver sounds pretty good value. Was it a sale/promo saver, or full fare?

Close to full saver fare, i think - $200 odd. so overall not $319, but better than $435. Will see if I win.

 

[max85]

so ive bid for the following flights all at minimum bid prices. if im successful on all of them the trip would cost me $1599 for original booking plus

VA1385 11 Jul 2016

ADL Adelaide

BNE Brisbane

$220 AUD per passenger (1)

VA7 11 Jul 2016

BNE Brisbane

LAX Los Angeles

$700 AUD per passenger (1)

VA2 21 Jul 2016

LAX Los Angeles

SYD Sydney

$950 AUD per passenger (1)

VA412 23 Jul 2016

SYD Sydney

ADL Adelaide

$220 AUD

 

[medhead]

Close to full saver fare, i think - $200 odd. so overall not $319, but better than $435. Will see if I win.

Successful @ $180 (minimum) CNS-BNE on Sunday. Notified about 48 hours prior.

 

[clipped_wings]

so ive bid for the following flights all at minimum bid prices. if im successful on all of them the trip would cost me $1599 for original booking plus

Is that for J on the domestic leg and PE on the long haul?

 

[pangwen]

Not sure if it's been asked before, but what's the view on the tax deductibility of the upgrademe payment? Eg in regards to employer having an economy only policy, then you put in a successful upgrade bid to business out of your own pocket. Unreimbursed meals and lounge access are usually deductible, my first thought is that an upgrade (being these two plus some other ancillary stuff like a better seat) would be similar?

 

[Deleted member 29185]

Not sure if it's been asked before, but what's the view on the tax deductibility of the upgrademe payment? Eg in regards to employer having an economy only policy, then you put in a successful upgrade bid to business out of your own pocket. Unreimbursed meals and lounge access are usually deductible, my first thought is that an upgrade (being these two plus some other ancillary stuff like a better seat) would be similar?

I'll wait for a more concise answer as well, however as far as I know, the tax dept does not enter into debates about BFOD and any legitimate expense incurred whilst carrying out business is tax deductable. If your employer doesn't reimburse and it's not part of the home to work commute, then I'd be assuming it is tax deductible. On a broader look, I'd also be curious to hear from a tax expert about how point accrual is viewed. I'd be assuming a fringe benefit may be declared, but I'm unsure on that (and it's never been raised by my accountant at least).

 

[clipped_wings]

On a broader look, I'd also be curious to hear from a tax expert about how point accrual is viewed. I'd be assuming a fringe benefit may be declared, but I'm unsure on that (and it's never been raised by my accountant at least).

As a small business owner, I know an upgrade payment is fully tax deductible, keep the documentation and as long as you can substantiate it was business related - you are entitled to fly in whatever class you consider conductive to business activity. Not sure what you are asking regarding the points accrual - has the expenditure that generated the points already been claimed?

 

[Deleted member 29185]

As a small business owner, I know an upgrade payment is fully tax deductible, keep the documentation and as long as you can substantiate it was business related - you are entitled to fly in whatever class you consider conductive to business activity. Not sure what you are asking regarding the points accrual - has the expenditure that generated the points already been claimed?

Thanks for the confimation ...re.UpgradeMe expenses, but the points query was in regard to points earned on a claimable business expense. I guess it relates to all status "perks" whether it be cars, planes or accommodation. If we gain a "benefit" via business (ie tax deductible) expenditure, is it then fringe benefit assessable? I have no idea (as I said, my accountant has never raised it as a possibliity even though, at times, he's portraited surprise at my (genuine) travel expenses....... so is there a concern? For my recent (past few years) travel....I earn in a foreign currency (ie foreign country), so I doubt there is an issue (especially as I pay more tax than I would if in AU), but I think it is a good thing if everyone is aware of the possible obligations (rather than me just being a simple killjoy).

 

[Mogul]

Thankfully FF points are too hard for the ATO to deal with and the go through to the keeper.

 

[clipped_wings]

Thankfully FF points are too hard for the ATO to deal with and the go through to the keeper.

Official policy on the Australian Government website:

3. TR 1999/6 - flight rewards
TR 1999/6 provides that flight rewards received under consumer loyalty programs are generally not taxable. However, it also notes that FBT may apply where:

· the employer and the employee have a family relationship and the flight reward is received in connection with the employment, or· a flight reward is provided to an employee, or the employee's associate, under an 'arrangement' for the purposes of the Fringe Benefits Tax Assessment Act 1986, that results from business expenditure.[SUP]3[/SUP]​

The flight reward might also be subject to income tax if they are received by an individual who

· renders a service on the basis that an entitlement to a flight reward will arise· receives the flight reward as a result of business expenditure, or· where the activities associated with the obtaining of the reward amount in themselves to a business activity.[SUP]4[/SUP]



​

 

[clipped_wings]

Further down on the ATO site is this example, closest to your scenario I believe.
Example 2
Paula frequently travels interstate on business. Her employer has provided her with a corporate credit card so that she can pay for her business-related accommodation - meals, taxis, hire cars, etcetera. There is a fee for operating the corporate card but the savings in administration costs far outweigh the fee charged. The credit card company has a loyalty program and Paula joins.
The credit card arrangement exists primarily because it delivers administrative benefits to Paula's employer, not to her. Accordingly, it is unlikely that a sufficiently material connection exists with her personally for any loyalty rewards to be in respect to her employment. As the conditions listed in section 5 of this practice statement don't apply, it isn't necessary to refer this case to a senior technical leader; nor is further administrative action warranted.

Loosely translated - you are safe as. Happy flying my friend.

 

[Deleted member 29185]

I wish tax rules were simple. In my case, I own the business (a corporation and family trust) and I do the traveling....so there is a family connection (and I'd be thinking many others on this forum would be in a similar position as me). I've no idea what "an arrangement" may be under the Fringe Benefit Tax law so I can't say whether that be the case or not, but the points are a minor perk. They are very correct in stating in the example that the administrative ease paying by card outweighs the cost of the card, but it would also be correct to say I use the cards to maximise the point earn wherever I can, even to the point of paying for multiple cards to achieve that end.

The Tax Dept has left it wide open as a future "gotcha" by using non-descript words like "generally not taxible" and "FBT may apply" and "might also be subject to income tax", which leaves us totally in the dark. I have no idea as to why a "family" connection between an employer and employee would change the facts as set out in the example. If it's OK for non-related Paula, why would it be different if Paula was the sister of the business owner? That doesn't diminish the primary reason for the card being administrative ease, does it?

On the income tax bit, I can see that applying to most people who earn points for business related expendature, especially on the 2nd and 3rd points! That is.....anyone who earns points from a business expenature or in association with carrying out a business. That'd apply to anyone who uses the card to pay for anything to do with their business....from purchase of goods, to travel.

Last bit......how does one value a point? Does the tax dept really research the value of a flight paid for by points and apply that? Point value is open to all kinds of debate and it's been shown here on AFF that it is not as simple as dividing the fare by the number of points. Other factors like what would you have been prepared to pay for the fare had you bought it with cash? That will vary from person to person and so too, what you pruchase with the points......a toaster is not a very wise choice whereas a pointy end upgrade is worth considerably more......making a point worth something between next to nothing up to a number of cents per point.

 

[clipped_wings]

I see your perspective Swan, with the ambiguity of the definition. However your accountant can put your mind at ease - a good one should be worth every dollar in peace of mind eh?