TobyShadow

I've read all the info on this forum about the Living Away From Home Allowance. However, I am getting problems with my company. They are being very coy about it.

I've been here in Melbourne on a 457 visa for four months now. When I originally approached my HR person a couple of months ago she told me that "it's normally something that we negotiate before a contract is signed". I was slightly taken aback by this attitude as there was no mention of this in my original discussions with the company and being in England at the time I didn't have a great understanding about the intricacies of the Australian taxation system.

Since then I've approached her a couple of times now and she has fobbed me off with an excuse that the HR chief in Sydney hasn't got back to her yet.

I was just wondering if anybody else has experienced similar attitudes and how best to deal with it?

Alan Collett

See my posting here for recently Rulings issued by the ATO that support your argument that they COULD pay the LAFHA to you without there being an adverse tax consequence:
http://britishexpats.com/forum/showt...76#post2891676

There is no obligation to pay you tax free money of course, but they could pay you in such a manner to retain your goodwill and encourage you to hang around ... :-) ... albeit that as a 457 visaholder there isn't a lot of arm twisting you can do ...

Good luck!

TobyShadow

Cheers for the information. The first I heard about it was through a friend at my company who was returning to the UK and received a large tax rebate because he wasn't informed about the LAFHA until the last minute.

I just don't see why they wouldn't allow the LAFHA. Is there an adverse tax consequence for the company if they do? My understanding is (from talking to Poms here on the LAFHA) is that there isn't.

Alan Collett

The risk does in fact sit with the employer. The LAFHA is dealt with in the tax legislation under the Fringe Benefits Tax heading - if the employer considers you to be entitled to the LAFHA and the ATO disagrees the employer ends up with a FBT liability, plus interest.

This said, there is a reasonable body of evidence now available (such as the Rulings noted above) that supports the circumstances in which an employer should be happy making a LAFHA available. And of course an employer can always consult a tax advisor or seek a Ruling if additional comfort is needed ... on which note we'll be pleased to provide assistance to your employer if they are receptive to taking advice from a third party.

Indeed, you might be happy to pay for the advice given the tax you could save ... or the cost of the professional advice might be salary packaged ...

Best regards.