Changes to FBT rules on cars (novated leases etc)

[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.

[Corey_R]

Lets just be nice and stop with the insults...

[zbeasty]

Lets just be nice and stop with the insults...

Fixed the wording. Sorry didn't mean it to sound like I was calling Gareth an idiot.

[gareth_oau]

not entirely true, zbeasty. I have a "company" car, but I catch a bus to work, so the car doesnt do many kms and get pinged with high FBT.

The world has moved on with salary packaging and my assistant accountant has a corolla who pays a lot of FBT because she doesnt do many kms - its just taken the tax office a hell of a long time to catch up with the real world.

Whats more the FBT rate is equal to the highest PAYE tax rate, so if you are in a lower PAYE tax rate you get burned twice.

If what you are saying is correct, and it was designed to burn the big bosses with their ferraris, then they certainly went about it with a sledgehammer approach

[brad]

"most of the bosses live close to their workplace"

Really? Source?

[cme2c]

Because I was born BC (thats Before Calculators) I can add up. As my wife does less that 15000 kms per year, we bought petrol rather than diesel, and didn't salary sacrifice. That may change come changeover time. Or get her to novate a Scirocco for me