The Federal Government has announced proposed changes to the fringe benefits tax (FBT) calculation for novated leases. The proposed date for the changes to take effect is 1 April 2014 if the legislation is successfully passed through Parliament.
If passed, what this means for individuals salary packaging their cars is that the lease payments will be made from your post-tax salary only from 1 April 2014. Employees on an average wage who take a novated lease on a $34,500 car would be approximately $8400 worse off over the four-year life of a novated lease.
For businesses or organisations, the implication will be significant increase to the level of FBT payable and the need for employees with company cars to submit logbooks of the company car usage over a three month period to justify the business usage.
A recent report claimed 65 per cent of new-car dealers will make redundancies in the coming months based on the predicted drop in sales if the changes to FBT are implemented as planned. However, Tony Abbot has pledged to block this legislation if elected next month.
If you are considering vehicle leasing, please contact Fusion for an obligation free discussion around how to make this work best for you and how to find the right finance company to assist you in this area.