Overview

The bill proposes changes to the rules regarding employee allowances, employee expenditure payments and employer-provided accommodation. The proposals follow an extensive review and consultation, including an officials’ issues paper published in November 2012.

The main changes are in relation to the treatment of employer-provided accommodation and accommodation payments, particularly when employees are on secondment or involved in a capital project. The accommodation will be tax-free up to certain time limits. The time limits are extended for Canterbury earthquake recovery projects. Other changes include better aligning the legislative treatment of meal payments with employer practice, which is to treat them as non-taxable in many cases, where they are not a salary substitute.

Twenty five written submissions (from 20 submitters) addressed the employee allowances proposals. Generally submitters were supportive of the overall aims of the proposals, subject to areas where clarifications or amendments were sought. The majority of submissions were in relation to the proposed accommodation rules, including the rules regarding valuation of accommodation.