New Zealand


  • Service: Tax
  • Type: Press release
  • Date: 8/03/2013

Media contact

Brett Cammell

External Communications

+64 9 367 5977

+64 21 335 740

KPMG Tax Contact

Rebecca Armour

Director - Tax

+64 9 367 5926

Inland Revenue increases costs of Christchurch rebuild 

Media release -  8 March 2012


Before Christmas, Inland Revenue released a Commissioner’s Statement suggesting most employer-provided accommodation and accommodation allowances are taxable.  This was not well received by employers or advisors.  Today, an appendix to that statement was posted to Inland Revenue’s website to explain when working away from home becomes a taxable “perk”.

Murray Sarelius, tax partner at KPMG, says “While the Commissioner accepts that an employee should not be taxed if they are working away from home, the statement adopts a harsh interpretation of what this means in practice.”

An example given by Inland Revenue will sound familiar to many people currently working away from home in Christchurch.  An engineer based in Auckland will be travelling to Christchurch during the week and returning home to his family most weekends.  This is expected to last for the duration of the rebuild.  Inland Revenue’s conclusion: he will be taxed on the value of his accommodation.


Elsewhere in the statement, Inland Revenue suggests that any accommodation provided for more than a year will be taxable. 

Combine this interpretation with the fact that Inland Revenue is claiming that this is a long-held view, it does not bode well for anybody travelling for work on a long term basis – whether it is for the Christchurch rebuild, or for other demands of their work.

Olive Wallis, KPMG’s tax partner in Christchurch says “This is extremely unfortunate timing for the rebuild.  The additional tax cost will fall on either the employee or the employer, or will need to be passed on as an increase to the cost of the rebuild.”

“I hope that the additional cost will not discourage employers from sending staff with the right skills to help achieve the vision for a new vibrant Christchurch city.  There are currently hundreds of employees across a range of trades and industries that are working in Christchurch on a temporary basis and away from their families.  The fact that this change is retrospective will also cause difficulties.” says Wallis.


Inland Revenue is expecting voluntary disclosures to be made by anybody affected, and depending on circumstances this liability will reach back 2 to 4 years.

The position in the Inland Revenue statement is quite different from the approach proposed in the tax policy review of employee allowances that started last November.  “Hopefully, a review of the legislation will progress as a matter of urgency and restore some sanity to the situation.” says Wallis.

Sarelius says “Inland Revenue is claiming to change the rules retrospectively, without due process.”


“In my view, Inland Revenue’s interpretation has a number of inconsistencies and is not supported by the legislation.  Unfortunately, it is likely to be the position that they will enforce”, says KPMG’s Murray Sarelius. “In fact, many people may already have a tax liability that they do not realise.” 





For more information, contact:

Brett Cammell

External Communications Manager

+64 9 367 5977

+64 21 335 740



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