Employer Provided Car Parks

Employers are required to pay FBT on non-cash benefits provided to staff. However, like most taxes, there are exemptions. It is important to be aware of the exemptions to ensure FBT is not overpaid. One such exemption provides that benefits (other than travel, accommodation or clothing) provided and used on the employer’s premises will not be subject to FBT. The provision of carparks fits within this exemption category.

Historically, what qualifies as “premises of the employer” has been uncertain. For example, if an employer is located next door to a carpark building and arranges and pays for six employees to have access to carparks in the building, do these carparks qualify as being provided on the employer’s premises?

The IRD has recently finalised two Public Rulings that include a change to its position on what qualifies as “premises of the employer” in this situation. Previously, the legal form of the car parking arrangement was the determining factor. For instance, carparks were required to be owned or leased by the employer to qualify for the exemption. Licence agreements did not satisfy the exemption requirements, even if the substance of the agreement was more akin to a lease.

In its Ruling, the IRD has softened its view and allowed a ‘substance over form’ approach. This will increase the number of situations that fall within the exemption by allowing license agreements to be regarded as being “on premises”, provided that the employer has a “substantially exclusive” right to use the carpark.

IRD has defined the phrase “substantially exclusive right” to mean that no one, including the carpark operator or any other third party, can use or control the carpark in a manner inconsistent with the employer’s substantially exclusive right.

The IRD provide a list of practical considerations which help to determine whether the employer has a ‘substantially exclusive right’. Although not definitive, the FBT exclusion is likely to apply if the employer has unrestricted access to the carpark, the carpark remains vacant when the employer is not using it, the employer may permit others to use the car parking space, if an unauthorised person parks in the space the employer has the right to tow the unauthorised vehicle and, the employer can decide how the car parking space is used.

What this effectively means is that the nature of the agreement, rather than the label on the document will determine whether the exclusion applies. In recognition of the change in position, IRD are allowing employers to request refunds of previously paid FBT where employers have relied on the old approach.

Women In The Workforce

Thirty years ago, women would generally leave school at an earlier age than men and with fewer qualifications. The roles women assumed in society were very different and were often paid a much lower wage than what was received by their male counterparts. However, economic development, changing social beliefs and increased education has led to more women obtaining jobs in occupations once reserved for men. Employment opportunities are opening up as more and more females further their education through tertiary institutions. In fact, statistics from leading New Zealand universities put female attendance at almost half their student populations, allowing many to move on to obtain graduate level employment positions.

Despite these recent advances, there continues to be a pay gap between men and women (in 2014 the New Zealand gender pay gap was 9.9%) and many female employees continue to sit at a relatively low rung on the career ladder. At the top, in more senior, executive and board type positions, women continue to be in the minority. This means that their views and opinions are vastly under represented in the decision making processes, which can be problematic given that studies support gender diversity at the top being critical to sustaining performance.

The performance enhancing effects of women working in executive positions goes beyond simply boosting a company’s image and reputation. Reports out of Harvard University have shown that entities with women directors deal more effectively with risk and long term priorities, as women tend to be more strategic thinkers with a natural ability to scenario plan and find creative solutions. Having women in top positions can also improve the performance of other female employees who look up to the more senior women as role models.

Another benefit of having females at the top is that they are generally more familiar with consumer needs. Where women tend to drive the majority of consumer purchase decisions, having women involved at the top can enable more successful products and services to be developed. So with that being said, you would think the ratio of females to males would be higher at the top.

A number of factors contribute to women’s lack of presence in more senior positions. An obvious one is the implications of childbirth, where taking time away from work often means women do not experience constant levels of progression throughout their career. Other factors that can prevent women from reaching those top positions include a lack of support provided by other women, unconscious bias from males in more senior positions and potentially a lack of self-confidence.

It is important for both males and females to recognise and embrace the differences between each gender. It is not a matter of women trying to act like men. It is about people playing to their own strengths and earning the respect of their peers and subordinates by being themselves.

With studies suggesting that women are making a positive difference to the bottom line, it will be interesting to see whether firms that have a more balanced gender composition enjoy an unbalanced share of the profit.