Changes to FBT rules on cars (novated leases etc)

[pologti18t]

Press Release - Reforms to Car Fringe Benefit Rules [10/05/2011]

The changes are good for those who will sign up for a lease from today and who do 15000km or less

Anyone on here affected by the new rules?

[RoknRob]

Great news from an environmental point of view! You wouldn't believe how many people I've heard of going around and around the block trying to rack up the k's...

And all you climate skeptics, don't even start... Surely everyone can agree that conserving our finite fuel resources is a good thing.

[GraveDilute]

Unless you are someone like me who travels 90+ kms per day to travel to work due to the expense of inner city housing and lack of public transport to my work place. I easily meet the 25k/year requirement and don't travel unecessarily.

The extra money/week these new rules introduce hardly compensates for the estimated price difference that it would cost to buy a house in a closer location to work and not be stuck in the middle of nowhere.

I feel sorry for people who are waiting for cars on boats, have planned their finances accordingly and now may find themselves out of pocket.

[The_Hawk]

We are in the >25,000 boat here too, luckily the changes wont effect us until the next lease, but it's going to have a reasonable impact.

Hopefully the people with cars on boats will slip through as "contracts signed before xxx" ...

[Sword_Dude]

I feel sorry for people who are waiting for cars on boats, have planned their finances accordingly and now may find themselves out of pocket.

There is still the operating cost or log book method if you do any decent work km!

[gareth_oau]

you really have to wonder which idiot in the tax office dreamt up the original rules?

A Company gives you a car, and so FBT is applicable, now as the name suggests, its about taxing the "benefit" you get.

Soooo, if you do lots and lots of kms, you pay a small amount of tax, but if you park the car in the garage and get very little benefit, you pay lots of tax????

Its about time the idiots in govt changed this ludicrous tax

[jaedencook]

I have leased my Polo but I'm unsure of what the changes mean.. could anyone be bothered dumbing it down and explaining it for me?

[philthy]

From the link in the first post:



Compared to the current statutory rates, a single rate of 20 per cent will:

increase the tax concession provided for vehicles driven less than 15,000 kilometres a year;
maintain the current tax concession provided for vehicles driven between 15,000 and 25,000 kilometres a year; and
decrease the tax concession provided for vehicles driven more than 25,000 kilometres a year.
People who use their vehicle for a significant amount of work-related travel will still be able to use the 'operating cost' (or 'log book') method to ensure their car fringe benefit excludes any business use of the vehicle.

[99_FGT]

I have leased my Polo but I'm unsure of what the changes mean.. could anyone be bothered dumbing it down and explaining it for me?

If you have an existing lease: No changes proposed. These are only for leases not signed prior to 7:30pm on Wed 10/5.

[The_Hawk]

jaedencook:

So to summarise even further:

1. If you drive less than 25,000km a year there is no change or an improvement.
2. If you drive more than 25,000km a year you are worse off.
3. If you drive your car for work and log all the KM there is no change.

I'd guess that most people here fit into either 1 or 2.

Remember that the changes do not effect current leases and the changes will be brought in incrementally to 2014 so any impacts are gradual.

[Frankenstrat]

Why on earth would you "drive your car further than you need to"? Drive to work via the Nullabor?

[brad]

To save $3k-$4k in FBT liability? That was the difference to my wife if she did 24999km or 25001km. She was even pressured by her employer to make the "target" of 25,000km.

Employer paid for the fuel & all maintenance, her normal travel was about 22,000km a year, so we'd use her car for everything, even if we were going to the local shop 500m away. I got the dirts with having to log up a couple of thousand useless km for her in the last couple of months of the FBT year & started graphing her mileage & getting her to drive the long way home at the end of the month. I eventually sent a letter to The Greens & the Environment minister about 5 years ago pointing out how ludicrous the system was.

[gavs]

Thank god I didn't go novated lease.... Though it would have given me a good excuse to do a few windy mountain road runs....

[pologti18t]

Thank god I didn't go novated lease.... Though it would have given me a good excuse to do a few windy mountain road runs....

It would be great now if you do 15k Km or less. Before it was a marginal bet if you did less than 15000km.

[zbeasty]

you really have to wonder which idiot in the tax office dreamt up the original rules?

A Company gives you a car, and so FBT is applicable, now as the name suggests, its about taxing the "benefit" you get.

Soooo, if you do lots and lots of kms, you pay a small amount of tax, but if you park the car in the garage and get very little benefit, you pay lots of tax????

Its about time the idiots in govt changed this ludicrous tax

No idiots at the tax office. By paying for the vehicle out of pre tax income the higher paid worker is reducing their tax payments by a greater percentage. They realised at the time that most bosses lived close to the office and would not do that many km's so the benefit to them was made higher and therefore attracted more tax. Those that do plenty of km's are generally the lower paid worker who lives further from the office or the sales guy who does a heap of work km's.