To what extent might we see the landscape expand in what are deemed to be ‘employee benefits’, in relation to being potentially taxable?
Take the case of the electric automobile.
An article in the March issue of The Insurance & Investment Journal looks the changing face of employee benefits due to this environment friendlier evolution. Specifically, as to what Canada Revenue Agency (CRA) expects in record keeping to separate expenses for business versus personal use of vehicles, how should having a charge station at home, to service the electric cars, be taxed?
At a recent conference, CRA’s position was that “the charging station is not part of the vehicle price, nor does it fall within the operating expense benefit; it is a separate capital asset”. At least, the business use portion would be eligible for capital cost allowance claim. While a charging station might be considered a taxable employee benefit, if among things it’s considered to be a condition of employment and is owned by the employer, it’s not a benefit. A reasonable, proportionate claim for use of electricity may be used to reduce the employee’s operating expense benefit.
Thus, a graduated increase in the use of electric cars may seem to be an advance, but if used in a business context the entrails of taxation must be kept in mind.
Like many aspects of life, ways to maintain benefits tax-free continue to evolve in ever-widening tangents; so, consider other currently esoteric ‘benefits’ which might come under the radar of tax authorities…
How about the undeclared value of fruit samples eaten while working as a part-time picker?
How about the undeclared value of plastic gathered up while part of a road repair crew?
What about the boxes of office supplies accidentally taken home over the years, but never deliberately returned?
What about the extra food brought home after office parties, using the corporate caterer’s truck?
What about renting out one’s parking spot to friends, and claiming the various cars are on loan while you’re looking for a new one?
What about the social media ad money from inside information disseminated anonymously in a blog?
Clearly, some benefits are worth tangling in protocol more than others, so both the employee and the taxman need to consider their worth.
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A Wider Range of Employee Benefits
To what extent might we see the landscape expand in what are deemed to be ‘employee benefits’, in relation to being potentially taxable?
Take the case of the electric automobile.
An article in the March issue of The Insurance & Investment Journal looks the changing face of employee benefits due to this environment friendlier evolution. Specifically, as to what Canada Revenue Agency (CRA) expects in record keeping to separate expenses for business versus personal use of vehicles, how should having a charge station at home, to service the electric cars, be taxed?
At a recent conference, CRA’s position was that “the charging station is not part of the vehicle price, nor does it fall within the operating expense benefit; it is a separate capital asset”. At least, the business use portion would be eligible for capital cost allowance claim. While a charging station might be considered a taxable employee benefit, if among things it’s considered to be a condition of employment and is owned by the employer, it’s not a benefit. A reasonable, proportionate claim for use of electricity may be used to reduce the employee’s operating expense benefit.
Thus, a graduated increase in the use of electric cars may seem to be an advance, but if used in a business context the entrails of taxation must be kept in mind.
Like many aspects of life, ways to maintain benefits tax-free continue to evolve in ever-widening tangents; so, consider other currently esoteric ‘benefits’ which might come under the radar of tax authorities…
How about the undeclared value of fruit samples eaten while working as a part-time picker?
How about the undeclared value of plastic gathered up while part of a road repair crew?
What about the boxes of office supplies accidentally taken home over the years, but never deliberately returned?
What about the extra food brought home after office parties, using the corporate caterer’s truck?
What about renting out one’s parking spot to friends, and claiming the various cars are on loan while you’re looking for a new one?
What about the social media ad money from inside information disseminated anonymously in a blog?
Clearly, some benefits are worth tangling in protocol more than others, so both the employee and the taxman need to consider their worth.
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