Guide call on tax breaks

BUSINESSES in Western Australia are demanding more guidance from the federal government on proposed changes to employee living-away-from-home benefits.

Treasury released a consultation paper in November last year on plans to change tax concessions on the benefits, with it said would take effect from July.

Benefits provided for expenses such as accommodation and food are currently tax free if the employee is away from their usual place of residence; this accounts for a significant proportion of income in WA’s fly-in, fly-out contracts.

Overseas workers on temporary visas, including 457 visas, are also entitled to the tax break as they can claim their usual place of residence as their home country.

Among the changes proposed by Treasury is that overseas workers nominate a ‘usual place of residence’ in Australia before they can qualify for the concession.

It also intends to place a requirement on all workers, both international and domestic, to substantiate claims for all accommodation expenses, as well as food, above a certain level.

Ernst & Young human capital partner Tanya Ross Jones said the proposed changes placed a significant burden on employers and more guidance was needed.

“It’s been more than two months now since there has been any activity from Treasury and we are talking to clients every day about how they are supposed to decide what to do or how they do it,” Ms Ross Jones said.

“Changing employment contracts is complicated enough, but trying to do any of these things when you don’t actually know what we are dealing with is really problematic.”

The period for public submissions on the 17-page consultation document closed at the beginning of February.

In a statement, Treasury said it was still considering issues raised in the submissions and expected to have draft legislation available in the next couple of months, but that would be subject to further consultation.

In the meantime, Treasury said employers should proceed on the basis of the government’s November proposals.

Recruitment company Chandler McLeod, which claims a big clientele among the ASX’s top 100 companies, said both it and its clients felt there had been too little communication from Treasury.

“There was a flow of information a while back but nothing really since,” it stated.

“(Businesses) are simply getting on with life in the absence of anything further in terms of guidance and information.”