The Inland Revenue Department has recently announced its report on the regulatory stewardship review of the FBT regime in New Zealand. The Public Sector Act 2020 enforces regulatory stewardship on government departments. It ensures that key regulatory systems are healthy, operating efficiently, and have adapted to changes in time. The purpose of this review is to perform an in-depth analysis of the operative structure and mechanics which play a part in the FBT regime and the projected future compatibility with business changes in the next 5 to 10 years.
The last such review took place approximately 20 years ago. We expect a significant analysis of FBT implications of low-value non-cash benefits to employees, updates to FBT-free thresholds, and clearer commentary on existing provisions that have left taxpayers wanting answers over the last decade. The major common benefits such as motor vehicle use and subsidised goods/services are expected to remain unchanged. However, modifications to existing rules and thresholds are expected to allow more businesses to comply with the FBT rules. The final change expected is the adoption of the “flexibility in workplace” that we have become accustomed to by virtue of the Covid-19 pandemic. Additional rules which account for the modern workplace environment are expected to be highlighted in this review.
Being at the forefront of our client’s issues and an industry leader in tax advisory, Bellingham Wallace has noted feedback received on technical issues over the years in the FBT regime. We intend to deliver these feedback to the Inland Revenue by way of a formal submission. This will ensure that compliance and mechanical issues within the existing FBT rules are highlighted in a bid to seek clarification or amendment to these FBT provisions. Do keep a lookout for our posts as we track along the milestones that we cross in the FBT review process. We expect major updates to the FBT rules in adopting to the needs of the modern business.
At Bellingham Wallace, our Tax Team have personnel who specialise in FBT advise, compliance and reviews. Get in touch and we can discuss the particular rules that apply to you and how this review process could potentially affect your business in the future.