Reference?

Labour are putting the top tax rate up for those earning over $180k

One direct consequence of this is FBT will increase from 49.25% to 63.93% for everybody regardless of their tax rate as FBT is a flat rate tax. This means a pretty significant tax increase for perks which incur FBT.

xpd:

 

Reference?

 

 

https://www.stuff.co.nz/national/politics/300180688/employee-perks-could-be-axed-after-government-tax-change

Haven't read the article, but assume "perks" are things like personal use of company car etc? Things that not as many people get as they used to...

blackjack17: According to the linked article fbt is not flat rate.

It is just so complicated that companies just pay the maximum rate as it is cheaper than compliance.

Correct. Taxing it individually for all employees and every benefit at different tax rates is a nightmare so most companies simply pay it at the flat (highest) rate.

This tax increase really is so poorly thought out on so many fronts - it's a token gesture that we know raises to many compliance and avoidance issues that can't be sorted without increasing taxes for many other things such as trusts.

What would be a really good move would be to remove the FBT exemption for dual-cab utilities.
AIUI, at the moment these are treated as "utility" i.e. work vehicles which are supposed in theory to be too rough & tough for private use, so not a perk, so no FBT.
If you look inside many of these "working man's trucks", you'll see that is rubbish: they are personal & family transport which happens to be occasionally used for some work purpose. Some even have kiddy seats installed.

It's a rort.

Nice, nice, that's really well thought out, like most of their other policy. In trying to stick-it to the man at the top, they kicking the man at the bottom in the teeth. Well done! I was hoping that with the Greens being being side-lined at the last election we'd see less of this nonsense. 

I wonder if they're hoping to stimulate job creation for administrators and accountants by making it so expensive to pay the flat rate, that companies start calculating individual rates. There has been a bit of this type of job creation in the safety and building industry.

tripper1000:

 

Nice, nice, that's really well thought out, like most of their other policy. In trying to stick-it to the man at the top, they kicking the man at the bottom in the teeth. Well done! I was hoping that with the Greens being being side-lined at the last election we'd see less of this nonsense. 

 

I wonder if they're hoping to stimulate job creation for administrators and accountants by making it so expensive to pay the flat rate, that companies start calculating individual rates. There has been a bit of this type of job creation in the safety and building industry.

 

We won't introduce any new taxes this term..

No, but you'll hike all the existing ones. Funny how this wasn't something they campaigned on during the election.

tripper1000:

 

Nice, nice, that's really well thought out, like most of their other policy. In trying to stick-it to the man at the top, they kicking the man at the bottom in the teeth. Well done! I was hoping that with the Greens being being side-lined at the last election we'd see less of this nonsense. 

 

I wonder if they're hoping to stimulate job creation for administrators and accountants by making it so expensive to pay the flat rate, that companies start calculating individual rates. There has been a bit of this type of job creation in the safety and building industry.

 

The debt created by Covid has to be serviced. This is better than an across the board PAYE tax increase. Yes I will be hit as my wife is in the high income bracket and there are a couple of small perks but Covid hit hard and the ferryman is wanting payment.

tripper1000:

 

... In trying to stick-it to the man at the top, they kicking the man at the bottom in the teeth. 

 

...

 

I don’t understand this - how are they “kicking the man at the bottom in the teeth”?

tripper1000:

 

In trying to stick-it to the man at the top, they kicking the man at the bottom in the teeth.

 

The man at the bottom rarely, if ever, gets perks. So it's completely irrelevant, not a kick in the teeth.

PolicyGuy:

 

What would be a really good move would be to remove the FBT exemption for dual-cab utilities.
AIUI, at the moment these are treated as "utility" i.e. work vehicles which are supposed in theory to be too rough & tough for private use, so not a perk, so no FBT.
If you look inside many of these "working man's trucks", you'll see that is rubbish: they are personal & family transport which happens to be occasionally used for some work purpose. Some even have kiddy seats installed.

 

It's a rort.

 

It's a rort that is probably not even correct:

https://baucher.tax/is-that-ute-really-exempt-from-fbt/

I believe the rules for small companies have changed to the point where you can nominate two vehicles as being basically exempt from the FBT net but it does change what you can claim in terms of running costs.