0:02

which has been approved by Rick Kimberly

0:04

and RSM Australia. Now we have covered

0:06

that. Welcome to our global employer

0:08

services update for the month of April

0:11

2025. In this month's video, we'll take

0:14

you through key developments across

0:16

fringe benefits tax, payroll tax,

0:18

contractor arrangements, wage

0:20

compliance, and pay as you go

0:21

withholding. Let's dive

0:24

in. With the 2025 FBT season now

0:28

underway, we wanted to rehash a number

0:31

of key developments that apply from the

0:33

1st of April 2025 and are new or updated

0:36

for the 2025 FBT year. These updates may

0:40

impact your reporting obligations,

0:42

recordeping and FBT liability,

0:44

particularly in relation to vehicles

0:46

substantiation and atto compliance focus

0:49

areas. From the 1st of April 2025,

0:53

plug-in hybrid electric vehicles, PHEVs,

0:56

will no longer qualify for the FBT

0:58

exemption for zero or low emissions

1:00

vehicles. However, employers can

1:03

continue to apply the exemption where

1:05

the PV was first used or available for

1:08

use before the 1st of April

1:10

2025. And there is a financially binding

1:13

commitment to continue providing the car

1:15

beyond this date. Note, optional

1:17

extensions are not sufficient.

1:20

The ATO has now also completed its

1:22

consultation on how to value both

1:24

electricity and petrol costs for plug-in

1:26

hybrid electric vehicles, PHEVs. While

1:30

PCG 202042 outlines a method for

1:33

calculating home charging costs for

1:34

electric vehicles, it does not apply to

1:37

PHEVs which rely on a combination of

1:40

electricity and petrol. New guidance

1:42

specific to PHEVs is expected later in

1:45

2025 and will provide a simplified

1:48

approach for calculating the cost of

1:50

both fuel

1:52

types. New from the 1st of April 2025,

1:55

employers may now use corporate records,

1:58

for example, system reports or payroll

2:00

data in place of certain employee

2:02

declarations and travel diaries. This

2:05

applies to a range of common

2:06

declarations including living away from

2:08

home allowances, vehicle and relocation

2:11

travel and otherwise deductible expense

2:14

claims. Employers can choose to use

2:16

either the traditional declaration forms

2:18

or alternative records but must have the

2:21

required data available at the time of

2:24

lodgement. The ATO has confirmed that

2:26

motor vehicles remain a key area of

2:28

compliance concern. Employers should

2:30

take note of the following specific

2:32

items. Vehicle classification. Ensure

2:35

vehicles are correctly categorized. For

2:37

example, passenger cars versus

2:40

commercial vehicles as this impacts the

2:42

FBT treatment and available exemptions.

2:45

Second is the quality of log books. The

2:48

ATO expects detailed, accurate and

2:50

representative log books. Incomplete or

2:52

inconsistent records may be disregarded

2:54

leading to higher FBT liabilities.

2:57

Thirdly, employers need to remember that

2:59

private use of vehicles is subject to

3:00

FBT. Travel between home and work,

3:03

school pickups and lunch trips are

3:05

generally considered private use and

3:07

attract FBT. Finally, employers need to

3:10

consider employee contributions. These

3:12

must be properly substantiated and

3:15

correctly reported in both the FBT

3:17

return and the employer's income tax

3:19

return. The ATO is also reviewing nil

3:21

returns and non-lodgement notices more

3:23

closely. Employers submitting a nil

3:25

return should be confident that no frr

3:27

benefits were provided in the year.

3:31

Further to the previous slide and as

3:33

part of a wider data matching

3:34

initiative, the ATO is sending letters

3:36

to employers where it identifies

3:38

potential FBT risks, particularly where

3:41

company registered vehicles are not

3:43

included in FBT lodgements and the

3:45

vehicles may not be used solely for work

3:47

rellated purposes. To the extent you

3:49

have any vehicles on your fixed asset

3:51

register, please consider whether there

3:53

are FBT obligations.

3:57

Now, we will touch on a recent

3:58

development in the contractors and

3:59

payroll tax space. In roofing services

4:02

Queensland v. Commissioner of State

4:04

Revenue, the Queensland Civil and

4:06

Administrative Tribunal largely upheld

4:08

the commissioner's reassessments that

4:10

treated payments to various contractors

4:12

as taxable wages for payroll tax

4:15

purposes. The case focused on whether

4:17

exemptions to exclude contracts where

4:20

services are performed either by

4:22

multiple persons engaged by the

4:23

contractor or where services are

4:25

provided for less than 90 days in a

4:27

financial year should be applied. While

4:30

the tribunal accepted that one

4:31

contractor met the requirements of both

4:33

exemptions based on credible oral

4:35

testimony and supporting documentation,

4:38

it found that roofing services had not

4:40

met the evidentiary burden in relation

4:42

to other contractors including Aquafix

4:45

roofing, NSM roof services, CWT roofing

4:48

and Sunshine Coast maintenance plumbers.

4:50

The evidence presented, such as safe

4:52

work method statements and insurance

4:53

policies, was either insufficient, not

4:56

contemporaneous, or failed to establish

4:58

who actually performed the work. QCAT

5:00

reiterated that the onus is on the

5:02

taxpayer to prove on the balance of

5:04

probabilities that exemptions apply,

5:07

requiring specific job level evidence

5:09

rather than general assertions about

5:11

usual practice or industry norms. The

5:14

tribunal also cautioned that even where

5:16

re- ro- roofing work is generally unsafe

5:18

to complete a loan, this does not

5:20

automatically meet the legal test for

5:21

exemption unless it can be shown that

5:23

two or more workers were engaged by the

5:25

contractor and not by the principal.

5:28

Ultimately, CQAT confirmed the

5:30

commissioner's decision to disallow

5:32

objections in relation to most

5:33

contractors, set aside the

5:35

commissioner's decision in relation to

5:37

SAS roofing, and directed the objection

5:39

be reconsidered in line with the

5:41

tribunal's findings. This case

5:44

highlights the importance of clear,

5:46

consistent documentation and evidence

5:48

when seeking to rely on contractor

5:50

exemptions under payroll tax

5:53

laws. By way of an update in the wage

5:56

compliance space, courts across multiple

5:58

jurisdictions have handed down a series

6:00

of decisions in recent weeks relating to

6:02

long service leave entitlements. These

6:04

cases span a range of issues including

6:07

continuity of service across state and

6:09

international borders as well as

6:11

employer obligations to contribute to

6:13

portable long service leave schemes,

6:16

particularly within the construction

6:18

industry. While the details vary, the

6:20

growing body of case law reflects an

6:23

increased willingness by tribunals and

6:25

regulators to scrutinize long service

6:27

leave entitlements and employer

6:29

compliance under state-based

6:30

legislation. Of note are Infosys

6:33

Technologies Vox, Energy Australia V Co-

6:36

Invest, Detector Inspector V Co- Invest,

6:39

and Corporate Air Charter V Australian

6:41

Federation of Air Pilots. Employers with

6:44

mobile workforces, construction related

6:46

roles or international transfers should

6:49

carefully review their long service

6:50

leave compliance and ensure they are

6:52

properly classifying employees and

6:54

contributing to the appropriate schemes.

6:56

This recent wave of cases highlights

6:58

that assumptions about long service

7:00

leave entitlement boundaries are

7:02

increasingly being tested before the

7:05

courts. The federal court has confirmed

7:08

that an employee can be genuinely

7:10

redundant even where the duties of a

7:12

proposed new role remain largely the

7:14

same if the redeployment involves a

7:16

material reduction in hours and

7:18

remuneration. In Bayer Castlev, Deputy

7:22

Commissioner of Taxation, the court

7:24

found that Miss Castle, a part-time

7:26

early learning assistant, had been made

7:28

genuinely redundant after her employer

7:30

offered alternative roles with 20 to 40%

7:33

lower hours and salary following a

7:35

restructure. Although the duties were

7:37

similar, the significant reduction in

7:39

working conditions meant the new roles

7:42

were not equivalent to her original

7:43

position. The ATO had classified the

7:46

termination payment as a regular

7:48

employment termination payment rather

7:50

than a genuine redundancy payment, which

7:53

is taxed more favorably. However, the

7:55

court disagreed, holding that genuine

7:57

redundancy can still apply where the

7:59

position no longer exists in its

8:00

original form, including where days,

8:03

hours, and remuneration have materially

8:06

changed. While the ATO has since

8:08

appealed this decision, the case is a

8:10

useful reminder for employers to

8:12

carefully assess termination

8:14

circumstances. It confirms that

8:15

substantial changes to working

8:17

conditions may amount to redundancy even

8:19

if some core duties are retained.

8:21

Employers are advised to ensure proper

8:23

tax characterization of termination

8:25

payments and seek advice if

8:29

uncertain. Thank you for joining us for

8:31

our April 2025 update. If you have any

8:34

questions or would like to discuss how

8:36

these developments may affect your

8:37

business, please don't hesitate to

8:39

contact your local RSM global employer

8:42

services team. Myself and Peter in

8:44

Melbourne, Gina and Neve in Perth, or

8:46

Jason in Sydney. We look forward to

8:49

supporting you through the 2025 FBT

8:51

compliance season.

0:00
This video contains synthetic content
0:02
which has been approved by Rick Kimberly
0:04
and RSM Australia. Now we have covered
0:06
that. Welcome to our global employer
0:08
services update for the month of April
0:11
2025. In this month's video, we'll take
0:14
you through key developments across
0:16
fringe benefits tax, payroll tax,
0:18
contractor arrangements, wage
0:20
compliance, and pay as you go
0:21
withholding. Let's dive
0:24
in. With the 2025 FBT season now
0:28
underway, we wanted to rehash a number
0:31
of key developments that apply from the
0:33
1st of April 2025 and are new or updated
0:36
for the 2025 FBT year. These updates may
0:40
impact your reporting obligations,
0:42
recordeping and FBT liability,
0:44
particularly in relation to vehicles
0:46
substantiation and atto compliance focus
0:49
areas. From the 1st of April 2025,
0:53
plug-in hybrid electric vehicles, PHEVs,
0:56
will no longer qualify for the FBT
0:58
exemption for zero or low emissions
1:00
vehicles. However, employers can
1:03
continue to apply the exemption where
1:05
the PV was first used or available for
1:08
use before the 1st of April
1:10
2025. And there is a financially binding
1:13
commitment to continue providing the car
1:15
beyond this date. Note, optional
1:17
extensions are not sufficient.
1:20
The ATO has now also completed its
1:22
consultation on how to value both
1:24
electricity and petrol costs for plug-in
1:26
hybrid electric vehicles, PHEVs. While
1:30
PCG 202042 outlines a method for
1:33
calculating home charging costs for
1:34
electric vehicles, it does not apply to
1:37
PHEVs which rely on a combination of
1:40
electricity and petrol. New guidance
1:42
specific to PHEVs is expected later in
1:45
2025 and will provide a simplified
1:48
approach for calculating the cost of
1:50
both fuel
1:52
types. New from the 1st of April 2025,
1:55
employers may now use corporate records,
1:58
for example, system reports or payroll
2:00
data in place of certain employee
2:02
declarations and travel diaries. This
2:05
applies to a range of common
2:06
declarations including living away from
2:08
home allowances, vehicle and relocation
2:11
travel and otherwise deductible expense
2:14
claims. Employers can choose to use
2:16
either the traditional declaration forms
2:18
or alternative records but must have the
2:21
required data available at the time of
2:24
lodgement. The ATO has confirmed that
2:26
motor vehicles remain a key area of
2:28
compliance concern. Employers should
2:30
take note of the following specific
2:32
items. Vehicle classification. Ensure
2:35
vehicles are correctly categorized. For
2:37
example, passenger cars versus
2:40
commercial vehicles as this impacts the
2:42
FBT treatment and available exemptions.
2:45
Second is the quality of log books. The
2:48
ATO expects detailed, accurate and
2:50
representative log books. Incomplete or
2:52
inconsistent records may be disregarded
2:54
leading to higher FBT liabilities.
2:57
Thirdly, employers need to remember that
2:59
private use of vehicles is subject to
3:00
FBT. Travel between home and work,
3:03
school pickups and lunch trips are
3:05
generally considered private use and
3:07
attract FBT. Finally, employers need to
3:10
consider employee contributions. These
3:12
must be properly substantiated and
3:15
correctly reported in both the FBT
3:17
return and the employer's income tax
3:19
return. The ATO is also reviewing nil
3:21
returns and non-lodgement notices more
3:23
closely. Employers submitting a nil
3:25
return should be confident that no frr
3:27
benefits were provided in the year.
3:31
Further to the previous slide and as
3:33
part of a wider data matching
3:34
initiative, the ATO is sending letters
3:36
to employers where it identifies
3:38
potential FBT risks, particularly where
3:41
company registered vehicles are not
3:43
included in FBT lodgements and the
3:45
vehicles may not be used solely for work
3:47
rellated purposes. To the extent you
3:49
have any vehicles on your fixed asset
3:51
register, please consider whether there
3:53
are FBT obligations.
3:57
Now, we will touch on a recent
3:58
development in the contractors and
3:59
payroll tax space. In roofing services
4:02
Queensland v. Commissioner of State
4:04
Revenue, the Queensland Civil and
4:06
Administrative Tribunal largely upheld
4:08
the commissioner's reassessments that
4:10
treated payments to various contractors
4:12
as taxable wages for payroll tax
4:15
purposes. The case focused on whether
4:17
exemptions to exclude contracts where
4:20
services are performed either by
4:22
multiple persons engaged by the
4:23
contractor or where services are
4:25
provided for less than 90 days in a
4:27
financial year should be applied. While
4:30
the tribunal accepted that one
4:31
contractor met the requirements of both
4:33
exemptions based on credible oral
4:35
testimony and supporting documentation,
4:38
it found that roofing services had not
4:40
met the evidentiary burden in relation
4:42
to other contractors including Aquafix
4:45
roofing, NSM roof services, CWT roofing
4:48
and Sunshine Coast maintenance plumbers.
4:50
The evidence presented, such as safe
4:52
work method statements and insurance
4:53
policies, was either insufficient, not
4:56
contemporaneous, or failed to establish
4:58
who actually performed the work. QCAT
5:00
reiterated that the onus is on the
5:02
taxpayer to prove on the balance of
5:04
probabilities that exemptions apply,
5:07
requiring specific job level evidence
5:09
rather than general assertions about
5:11
usual practice or industry norms. The
5:14
tribunal also cautioned that even where
5:16
re- ro- roofing work is generally unsafe
5:18
to complete a loan, this does not
5:20
automatically meet the legal test for
5:21
exemption unless it can be shown that
5:23
two or more workers were engaged by the
5:25
contractor and not by the principal.
5:28
Ultimately, CQAT confirmed the
5:30
commissioner's decision to disallow
5:32
objections in relation to most
5:33
contractors, set aside the
5:35
commissioner's decision in relation to
5:37
SAS roofing, and directed the objection
5:39
be reconsidered in line with the
5:41
tribunal's findings. This case
5:44
highlights the importance of clear,
5:46
consistent documentation and evidence
5:48
when seeking to rely on contractor
5:50
exemptions under payroll tax
5:53
laws. By way of an update in the wage
5:56
compliance space, courts across multiple
5:58
jurisdictions have handed down a series
6:00
of decisions in recent weeks relating to
6:02
long service leave entitlements. These
6:04
cases span a range of issues including
6:07
continuity of service across state and
6:09
international borders as well as
6:11
employer obligations to contribute to
6:13
portable long service leave schemes,
6:16
particularly within the construction
6:18
industry. While the details vary, the
6:20
growing body of case law reflects an
6:23
increased willingness by tribunals and
6:25
regulators to scrutinize long service
6:27
leave entitlements and employer
6:29
compliance under state-based
6:30
legislation. Of note are Infosys
6:33
Technologies Vox, Energy Australia V Co-
6:36
Invest, Detector Inspector V Co- Invest,
6:39
and Corporate Air Charter V Australian
6:41
Federation of Air Pilots. Employers with
6:44
mobile workforces, construction related
6:46
roles or international transfers should
6:49
carefully review their long service
6:50
leave compliance and ensure they are
6:52
properly classifying employees and
6:54
contributing to the appropriate schemes.
6:56
This recent wave of cases highlights
6:58
that assumptions about long service
7:00
leave entitlement boundaries are
7:02
increasingly being tested before the
7:05
courts. The federal court has confirmed
7:08
that an employee can be genuinely
7:10
redundant even where the duties of a
7:12
proposed new role remain largely the
7:14
same if the redeployment involves a
7:16
material reduction in hours and
7:18
remuneration. In Bayer Castlev, Deputy
7:22
Commissioner of Taxation, the court
7:24
found that Miss Castle, a part-time
7:26
early learning assistant, had been made
7:28
genuinely redundant after her employer
7:30
offered alternative roles with 20 to 40%
7:33
lower hours and salary following a
7:35
restructure. Although the duties were
7:37
similar, the significant reduction in
7:39
working conditions meant the new roles
7:42
were not equivalent to her original
7:43
position. The ATO had classified the
7:46
termination payment as a regular
7:48
employment termination payment rather
7:50
than a genuine redundancy payment, which
7:53
is taxed more favorably. However, the
7:55
court disagreed, holding that genuine
7:57
redundancy can still apply where the
7:59
position no longer exists in its
8:00
original form, including where days,
8:03
hours, and remuneration have materially
8:06
changed. While the ATO has since
8:08
appealed this decision, the case is a
8:10
useful reminder for employers to
8:12
carefully assess termination
8:14
circumstances. It confirms that
8:15
substantial changes to working
8:17
conditions may amount to redundancy even
8:19
if some core duties are retained.
8:21
Employers are advised to ensure proper
8:23
tax characterization of termination
8:25
payments and seek advice if
8:29
uncertain. Thank you for joining us for
8:31
our April 2025 update. If you have any
8:34
questions or would like to discuss how
8:36
these developments may affect your
8:37
business, please don't hesitate to
8:39
contact your local RSM global employer
8:42
services team. Myself and Peter in
8:44
Melbourne, Gina and Neve in Perth, or
8:46
Jason in Sydney. We look forward to
8:49
supporting you through the 2025 FBT
8:51
compliance season.