Tax Bill proposals provide further support for Canterbury rebuild

Measures to clarify the tax treatment of certain employee allowances and reimbursements included in a tax bill introduced to Parliament today will be welcome news for employers and employees involved in Canterbury earthquake recovery work, say Canterbury Earthquake Recovery Minister Gerry Brownlee and Revenue Minister Todd McClay.

“As the Canterbury rebuild continues, businesses and employees are facing a very different work environment.  This may require some people to work away from their normal workplace, and be paid work-related allowances or provided with accommodation for the duration of a project,” says Mr Brownlee. 

“Employers have raised concerns with the Government that the tax consequences of these payments are not always straightforward.”

Revenue Minister Todd McClay said measures included in the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Bill would give employers and employees greater certainty over the boundary between what is a private expense and what is solely a work-related expense.

“In the context of the Canterbury rebuild, the bill ensures that when an employee is expected to work away from their normal place of work on a capital project that is part of the earthquake recovery, employer-provided accommodation and payments to cover accommodation expenses will be tax-exempt for up to five years,” says Mr Brownlee

“The provisions in this Bill build on specific proposals included as part of a tax bill earlier this year to extend the current time limit for Canterbury earthquake tax measures such as rollover relief for depreciation recovery income,” says Mr McClay.

“The proposals in the bill are a continuation of Government work to provide practical assistance and certainty to businesses and individuals working on the Canterbury rebuild,” the Ministers say.