This draft operational statement addresses whether employer-provided travel from an employee’s home to a distant workplace is subject to income tax, so PAYE must be deducted, or to fringe benefit tax (FBT).
In our submission we note that the statement, when finalised, will be a useful resourse for employers and that the proposed approach is pragmatic. We raise concerns that the Commission may change her approach in future and therefore recommend that the item is referred to Inland Revenue Policy and Strategy to consider a law change specific to employer-provided travel.
We also recommend that the scope of the draft operational statement should be extended to include the income tax implications of employer-provided travel from home to a workplace inthe same local area within the same town or city. This situation often arises in today’s flexible work environment.