No appeal in John Holland tax case

Thomson Reuters understands that the Tax Commissioner has not sought special leave to appeal the decision of the Full Federal Court in John Holland Group Pty Ltd & Anor v FCT [2015] FCAFC 82.

The Full Federal Court had held that costs incurred by John Holland Group companies in flying employees from Perth to Geraldton and back for a rail upgrade construction project would have been deductible to the employees, meaning the companies could reduce their FBT liability on the flight costs to nil.

Between May 2011 and September 2012, the employees of the companies worked on the rail upgrade project. The companies paid for their respective employees to be flown from Perth to Geraldton, near where the Project was located, and back again on a rostered basis. Employees travelled to Perth airport at their own expense, but Perth airport was designated in the John Holland rail documents as the “point of hire”.

The taxpayers considered the costs were deductible. The Commissioner disagreed and the matter came on appeal before the Federal Court. The Federal Court found for the Commissioner but on further appeal, the Full Federal Court found for the companies. Pagone J, who gave the main judgment, said the time spent in travelling from Perth airport to Geraldton was part of an employee’s employment for which he or she received wages and was entitled to an additional allowance if the period exceeded that provided for.

About the Contributor

Terry Hayes

Terry Hayes is a Senior Tax Writer with Thomson Reuters where he heads the Tax Newsroom for the company’s online workflow information solution Checkpoint. He is also Technical Editor for the Thomson Reuters Australian Financial Planning Handbook. Terry’s experience stems from 12 years at the Tax Office and several years in the “Big 4″ environment in Sydney. He is also a Registered Tax Agent.

View more by Terry