Perks may cost more says accountant

Press, 14 October 1985, Page 40

Perks may cost more says accountant

PA Auckland Companies paying the fringe benefit tax on employees’ perks may soon have to pay goods and services tax on them as well, says a leading accountant. Mr Jim Hoare, the tax spokesman for the Auckland branch of the Society of Accountants, said he had reached that conclusion. He has just completed the society's national submisX7n the Goods and Services Tax BillThe bill provides for a 10 cent tax on all goods? S Srvices supplied'by-

registered taxpayers “in the course of or furtherance of a taxable activity.” Mr Hoare said “taxable activity” is defined as any regular or continuous activity involving the supply of goods and services “for a consideration.” Once a company becomes involved in a taxable activity, the bill provides for GST to apply on everything it supplies — whether or not the recipient pays for it in money. If it is not paid for in money, the product is required in the bill to be - taxed at its “open market

value.” He said this would apply, for example, to housing provided by an employer, and to the use of a company car. Accountants, he said, were upset that the bill laid down no rules for assessing the market value in such cases. “We have the possibility of the same benefit being valued differently for fringe benefit tax and GST. They need to go back and have a look at the whole thing to get a consistent regime for both of them,” said Mr Hoare.(