Fbt

[gz1]

* Bl*** TAX!. or more widely known as Fringe benefits tax.

I currently have a novated lease, like many others in this forum I would think, and for the privilege I get to pay fringe benefits tax. Providing I travel more than 25,000 k's a year for any purpose, this tax is currently $5,400.00 per year.
Should I wish to use public transport, the bus stop is three doors down from my place and stops literally right outside work.
However should I choose to take the bus in daily, and cut down the number of cars on the road, I would not achieve sufficient mileage and my fringe benefits tax would increase to $13,300.00 per year. that's 26% the value of the car per year every year.
Does anyone else think this is just too stupid for words?. If the government is really trying to cut down on the number of cars on the road and encourage people to use public transport why this stupidity? And why is no-one talking about it in an election climate? Where are the greens?

[flappist]

Originally Posted by gz1

* Bl*** TAX!. or more widely known as Fringe benefits tax.

I currently have a novated lease, like many others in this forum I would think, and for the privilege I get to pay fringe benefits tax. Providing I travel more than 25,000 k's a year for any purpose, this tax is currently $5,400.00 per year.
Should I wish to use public transport, the bus stop is three doors down from my place and stops literally right outside work.
However should I choose to take the bus in daily, and cut down the number of cars on the road, I would not achieve sufficient mileage and my fringe benefits tax would increase to $13,300.00 per year. that's 26% the value of the car per year every year.
Does anyone else think this is just too stupid for words?. If the government is really trying to cut down on the number of cars on the road and encourage people to use public transport why this stupidity? And why is no-one talking about it in an election climate? Where are the greens?

So what you are saying is that you want to buy a car and claim it against your taxable income because you need to use it for work when you don't actually need to use it at all and just want the rest of Australia to pay for your car?

How is this different from young girls using their baby bonus to buy a plasma instead of baby things or claiming the dole while working?

It is FRAUD if you claim something that is not valid.

As far as public transport? What is that? Oh you mean the train, oops it stopped years ago, the bus, yes I have seen one them, I think it takes backpackers to Cairns.
Tax laws are made for ALL Australians not just capital city dwellers.

Where are the greens? Good question. I suspect they are finding it harder and harder to hold their branch meetings as Telstra removes all the telephone booths.

[gz1]

Originally Posted by flappist

So what you are saying is that you want to buy a car and claim it against your taxable income because you need to use it for work when you don't actually need to use it at all and just want the rest of Australia to pay for your car?

How is this different from young girls using their baby bonus to buy a plasma instead of baby things or claiming the dole while working?

It is FRAUD if you claim something that is not valid.

As far as public transport? What is that? Oh you mean the train, oops it stopped years ago, the bus, yes I have seen one them, I think it takes backpackers to Cairns.
Tax laws are made for ALL Australians not just capital city dwellers.

Where are the greens? Good question. I suspect they are finding it harder and harder to hold their branch meetings as Telstra removes all the telephone booths.

Maybe you should read a little closer. Nobody is claiming anything against tax. having a novated lease means you PAY tax on the fringe benefit not claim it back. What is stupid about it is that the MORE miles you do the LESS tax you pay with no restriction on business or private. so someone that uses his car only to get to and from work and lives just down the road from work will have to pay much more tax than someone that uses his car to take the family for a holiday to cairns. Now who is claiming something that is not valid.

Let me run you through it one more time.
Let's say fred and bob who live next to each other and work at the same place both got a novated lease car that cost 50k.
Fred only uses his car for work purposes and uses public transport wherever possible. Because of this he ends up doing less than 10,000 Km/year. Fred now has to pay a fringe benefits tax of $13,000 every year he has that car.
Bob however uses his car for everything. drive to the corner shop, family holidays, camping trips, even lends it out to friends and relatives and runs up 45,000 Km /year. For doing this Bob still has to pay a fringe benefits tax, however just because he is such a good guy and has clocked up all those miles he only pays $5,400 per year.
so end result the more you use your car for any purpose the less tax you pay.

Please enlighten us all as to how any of that is FRAUD as you put it.

[Smoke Pursuit]

Originally Posted by flappist

So what you are saying is that you want to buy a car and claim it against your taxable income because you need to use it for work when you don't actually need to use it at all and just want the rest of Australia to pay for your car?

How is this different from young girls using their baby bonus to buy a plasma instead of baby things or claiming the dole while working?

It is FRAUD if you claim something that is not valid.

As far as public transport? What is that? Oh you mean the train, oops it stopped years ago, the bus, yes I have seen one them, I think it takes backpackers to Cairns.
Tax laws are made for ALL Australians not just capital city dwellers.

Where are the greens? Good question. I suspect they are finding it harder and harder to hold their branch meetings as Telstra removes all the telephone booths.

So do you claim your car on your own tax, or write it off through your business???

[devilcv8]

best bet is to have an employer that provides operating leases. I pay one fixed amount and all fuel, tyres, services, repairs and FBT are paid by the company. it does not matter wether I do 100 km or 100,000 km in a year as the amount I pay does not change. Unfortunately not a lot of employers offer it.

[gz1]

Just for the record guys, I have had novated lease cars for the past 12 years and I do a lot of miles. Mainly family holidays, weekend drives, etc. The system the way it is suits me fine. What I am complaining about is how stupid the system is and the fact that pollies want us to use our cars less and jump on public transport yet penalize us if we attempt to. That is all.
Anyhow consider the subject closed.

[Buddy 1]

Originally Posted by gz1

Just for the record guys, I have had novated lease cars for the past 12 years and I do a lot of miles. Mainly family holidays, weekend drives, etc. The system the way it is suits me fine. What I am complaining about is how stupid the system is and the fact that pollies want us to use our cars less and jump on public transport yet penalize us if we attempt to. That is all.
Anyhow consider the subject closed.

As it has been pointed out you do this Lease arrangment because it saves you Money & lets you pay Less tax while others who cannot do this have to pay every cent for their vehicle & cannot claim anything back on Tax.

I wonder how these scenerio's would compare in actual dollars out of your own pocket even taking into account your gripe in saying that you wish to drive your vehicle less but still wish to retain the same arrangment as if you drove it more.

I wonder for a vehicle say costing $50000.00 how much you end up paying after all the tax benifets of your Lease arrangment are taken into account as for a person who has to get finance & pay entire amount themselves with no way to claim anything back they would be up for the initial Loan amount pluse 5 or so years of interest as well.

Enjoy your vehicle as I am sure you will however I do not think you have any grounds to complain.

[davocol]

Some are even generous enough to offer that on novated leases as well

Originally Posted by devilcv8

best bet is to have an employer that provides operating leases. I pay one fixed amount and all fuel, tyres, services, repairs and FBT are paid by the company. it does not matter wether I do 100 km or 100,000 km in a year as the amount I pay does not change. Unfortunately not a lot of employers offer it.

[devilcv8]

Originally Posted by davocol

Some are even generous enough to offer that on novated leases as well

Novated leases come a bad second. For example, I specced up a novated lease on a SSV, 40,000km a year, 4 year lease, residual of 12k. This only included 12 tyres over the 4 years.I have ended up going for an operating lease on a SSV (pick it up thursday) over 3 years. unlimited kms, unlimited tyres, unlimited servicing, unlimited mechanical repairs (inc windscreens etc) and 1 free at fault accident per year. Operating lease is cheaper by a long way, and I don't have the hassle of trying to keep a lease running if I leave the job, I leave, I hand the car back.

[flappist]

Originally Posted by LSTerritoryGhia

So do you claim your car on your own tax, or write it off through your business???

2 of them are not claimed at all, they are my private vehicles, the other 7 are owned and used by my company and as my personal work car does about 50,000km/m year it is not hard to justify its expenses.

[|||]

cars have concessional FBT treatment because they are a depreciating asset. school fees, loans, private health insurance payments etc are do not depreciate so do not get the discounted FBT rate that cars get.

more kms = more depreciation = lower value of car = lower benefit received = less tax payable

if you dont use the car much why would you salary package it? put the money into super instead and get a 100% FBT exemption.

[gz1]

Originally Posted by |||

cars have concessional FBT treatment because they are a depreciating asset. school fees, loans, private health insurance payments etc are do not depreciate so do not get the discounted FBT rate that cars get.

more kms = more depreciation = lower value of car = lower benefit received = less tax payable

if you dont use the car much why would you salary package it? put the money into super instead and get a 100% FBT exemption.

Of course. Silly me, my mistake, How could I possibly think that using a car for personal purposes, like holiday travel, would be a benefit. And By the same analogy how could I possibly think that the more you used it for personal purposes the less benefit you get. I feel silly now. Thanks for putting me straight.

[Grasshoppr]

Originally Posted by gz1

Of course. Silly me, my mistake, How could I possibly think that using a car for personal purposes, like holiday travel, would be a benefit. And By the same analogy how could I possibly think that the more you used it for personal purposes the less benefit you get. I feel silly now. Thanks for putting me straight.

But you get tax breaks because your Lease comes out of your pre tax dollars right??? :

Shut up and deal with it. If you agree to get the benefits of pre tax salary sacrifice then you must comply with the required klms that you have selected as part of your novated lease.

[|||]

Originally Posted by gz1

Of course. Silly me, my mistake, How could I possibly think that using a car for personal purposes, like holiday travel, would be a benefit. And By the same analogy how could I possibly think that the more you used it for personal purposes the less benefit you get. I feel silly now. Thanks for putting me straight.

my pleasure

maybe learn how the system works before you buy your next car

[feebs]

I have a leased work vehicle as well.

THe difference to me (as in how much tax I have to pay) between doing. say 11.000 kays per year, vs doing 35.000 kays per year was about $8500.

My accountant has suggested it may be better to go back to a standard loan and private purchase over the next couple of years.

[Pinkbits]

And i thought it was going to be a a thread about Fairlanes

[AU2PWR]

Fairlane By Tickfords , Better to spend your money on

[BionicGT]

I think the point of the post was that the current arrangement encourages higher mileage and thus more pollution. Many leases are fully maintained operating leases (includes all costs) and there is no residual - the vehicle is just handed back at the end of the 2 yr lease. The employee is often penalised if they don't do the miles they said they would do at the start of the lease.

[gz1]

Originally Posted by BionicGT

I think the point of the post was that the current arrangement encourages higher mileage and thus more pollution. Many leases are fully maintained operating leases (includes all costs) and there is no residual - the vehicle is just handed back at the end of the 2 yr lease. The employee is often penalised if they don't do the miles they said they would do at the start of the lease.

Thank you BionicGT. At least one person gets my point.

[Grasshoppr]

Originally Posted by gz1

Thank you BionicGT. At least one person gets my point.

So perhaps the title of the thread should be "Government encourages pollution" or somthing like that. In this world you never get something for nothing.

I still stand by the fact that you are receiving a benefit by doing this so just ensure that you know what the requirements are for having access to this benefit.

[davocol]

I guess it all depends on the term of the novated lease that is offered, for instance I can get a novated lease with unlimited ks, unlimited tyres servicing, everything all for a set price, I get 2 excess free at fault accidents per year and also if I was to be made redundant I can hand the keys back no questions asked, I am taking the car over 12 months just in case I decide to leave myself. I can also buy it out after a year at 65% of the cars original cost. For me it works quite well.

[devilcv8]

Originally Posted by davocol

I guess it all depends on the term of the novated lease that is offered, for instance I can get a novated lease with unlimited ks, unlimited tyres servicing, everything all for a set price, I get 2 excess free at fault accidents per year and also if I was to be made redundant I can hand the keys back no questions asked, I am taking the car over 12 months just in case I decide to leave myself. I can also buy it out after a year at 65% of the cars original cost. For me it works quite well.

I must be way off, but my understanding of a novated lease is all costs are paid out of your pretax salary, and each pay (wether that be week or month) money comes out of your pretax salary and goes into buckets to pay for fuel, rego, tyres, services, lease costs etc. If a bucket runs out, due to doing more kms, then you have to top up the "bucket" with more money.

Sounds like you are talking more about an operating lease with an extra at fault accident.

I'll send you a PM

[Focussed]

is there any fbt payable if your employer provides you with a company car and pays for the fuel, servicing, etc?

[devilcv8]

Originally Posted by Focussed

is there any fbt payable if your employer provides you with a company car and pays for the fuel, servicing, etc?

ATO has some good info on this, but basically if a company supplied vehicle is available for you to use privately then FBT is payable.

[Focussed]

devilcv8, how does the ato prove that the vehicle is being used privately?

[devilcv8]

Originally Posted by Focussed

devilcv8, how does the ato prove that the vehicle is being used privately?

They don't need to prove it is being used privately, just that it is garaged at the employees home and is therfore available for use. As I said, plenty on the ATO website to read about.

[Focussed]

Originally Posted by devilcv8

They don't need to prove it is being used privately, just that it is garaged at the employees home and is therfore available for use. As I said, plenty on the ATO website to read about.

thanks mate. i had a read & from what i read it would appear that its better to get the money in your hand from your employer as opposed to a company vehicle.

[devilcv8]

Originally Posted by Focussed

thanks mate. i had a read & from what i read it would appear that its better to get the money in your hand from your employer as opposed to a company vehicle.

That depends on each individual's circumstances and needs. Always best to find out what is available, how it will affect you etc, then if you are unsure, get professional advice.

In my situation I will spend more on running costs than what the lease car costs me, so it is a no brainer in mysituation.

[Focussed]

im in the process of negotiating my current salary package. i'm going to opt for more $$$ get the car I want, use it for business & private use & then claim it back at tax time

[devilcv8]

Originally Posted by Focussed

im in the process of negotiating my current salary package. i'm going to opt for more $$$ get the car I want, use it for business & private use & then claim it back at tax time

I rearranged my package and got my car allowance placed into my base salary. There is no effect on take home pay but I get more super and the bonus increases as it is based on a % of my base....