Fringe benefits tax rules prevent iPad rebate claims for business

THERE'S demand for the iPad in the corporate sector, but Australian fringe benefit tax rules prevent rebate claims

There's business demand for the iPad, it seems, in addition to its popularity with consumers // Damien Meyer AFP

FRINGE benefits tax rules are holding back demand for iPads in the corporate sector, according to salary packaging experts.

Simon Ellis, senior tax adviser with SmartSalary, said many of his company's clients had been keen to include iPads in salary packages, but most had concluded they would breach FBT rules.

The tax office recently told The Australian it would class the iPad as a portable electronic device under its FBT rules, but Mr Ellis said that left a bigger tax hurdle.

To qualify for salary sacrifice programs, companies were required to prove, case by case, that employees used the iPad "primarily" -- more than 50 per cent of the time -- for work, he said. "About 95 per cent of our customers have said no (to employees) but 5 per cent have said they're comfortable that there are roles for which the iPad is useful," Mr Ellis said.

Peter Lang, group executive at Maxxia, a subsidiary of Australia's largest salary packaging provider, McMillan Shakespeare, said the ATO tightened FBT rules for portable electronic devices in 2008 and this had led to a decrease in laptop sales. "The vast majority of employers have shut down laptop salary sacrificing programs since then," Mr Lang said.

"Ipads are perhaps a little bit more left of centre in so far as they appear to be marketed as an entertainment device rather than a traditional laptop. So we're not seeing much traffic at all on the iPad."

Read more at The Australian