Changes to Fringe benefit tax (FBT) on Vehicles financed by salary sacrifice

[ATHULA Lurker Find all posts View Profile Close ATHULA]

http://www.theage.com.au/small-busin...506-1eawv.html

Age reports that next Tuesdays federal budget will introduce a 20% fixed FBT rate for Vehicles financed by salary sacrifice.

This would hit hard on people doing 25000 km per year (FBT jump from 11% to 20%)

[matt150 Avid PP Poster! Find all posts View Profile Close matt150]

Sounds good for me. I chose 15000km a year for our leased small car and we pay 26% FBT so according to this proposal I will only be paying 20%, winner for me

[D4D-GXL Advanced Member Find all posts View Profile Close D4D-GXL]

Governments only make changes to either of two reasons:
1. Due to major public scrutiny or outrage, or
2. To increase the money the government receive.

I would say the later is the real reason for the change.

[voyager4x4 Junior Member Find all posts View Profile Close voyager4x4]

Maybe we should move this to the "Things that Tick you Off" thread

[alternative Senior Member Find all posts View Profile Close alternative]

So is this for "New" salary packaged cars, or are they going to apply it to current running leases ? I am 1 month into a lease on 25,000km, if this is applied to me its about 3k a year more.

This would have changed the decision to sal-pack the vehicle rather than buy outright !

It must be for new leases .... hopefully

[Bazza Senior Member Find all posts View Profile Close Bazza]

I doubt if this could be made retrospectively, as novated leases are binding contracts for the term of the lease agreement, and the terms agreed to cannot be changed until expiry. ( unless you negotiate with the lessor to pay it out early ) If it's bought in, and I lease another vehicle after my current one, it will effect me, as I travel well in excess of 40thousands K per year which attracts a 7 per cent FBT rate.
These mongrels will soon think of a way to tax the oxygen we breath!
Bazza

[Bassett Member Find all posts View Profile Close Bassett]

These mongrels will soon think of a way to tax the oxygen we breath!
Bazza

I think they are trying to do something close to that with the new carbon tax aren't they?

[Corigator Avid PP Poster! Find all posts View Profile Close Corigator]

Governments only make changes to either of two reasons:
1. Due to major public scrutiny or outrage, or
2. To increase the money the government receive.

I would say the later is the real reason for the change.

I think they said it would raise $95 million or was it $950 million extra - so thats the reason.

[K & M McF Senior Member Find all posts View Profile Close K & M McF]

Sounds like a good idea to me. Hopefully it will make it fairer for all people, not jus those who can afford to salary scarifice a car lease (how about train or bus fare for the year?).

[Richoson Avid PP Poster! Find all posts View Profile Close Richoson]

My Accountant told me about this as a proposal last month, I was looking at salary sacrifice again and he convinced me to take a fully maintained company car until they decide whether or not they bring it in.
Richo.

[Corigator Avid PP Poster! Find all posts View Profile Close Corigator]

Sounds like a good idea to me. Hopefully it will make it fairer for all people, not jus those who can afford to salary scarifice a car lease (how about train or bus fare for the year?).

I guesse those who can't afford to salary sacrifice don't pay tax. The rest of us fund the country.

[ozwapet2 Advanced Member Find all posts View Profile Close ozwapet2]

It's always seemed a bit weird to me that the FBT system rewarded people for the more miles they did in their cars
Especially when you see people going on 1000km trips for no other reason than to rack up the k's
In these days of trying to reduce emissions and saving our depleting fossil fuels seemed a bit of a paradox.
Makes sense - next -negative gearing lol ( ducks for cover )

[Corigator Avid PP Poster! Find all posts View Profile Close Corigator]

Wayne, I agree with that. I also was not happy doing the extra k's just to save money, it was ludicrous.
My objection is that rather than making the change cost neutral, and truly an environmental initiative, they have made it a cash grab.

[Richoson Avid PP Poster! Find all posts View Profile Close Richoson]

Hi Wayne

I believe that the concept the government uses for people claiming cars as tax benefits is they are meant to be used for work if you want a tax benefit, simply trying to equilise the taxation system so "the rich don't get richer and the poor get poorer".

Richo.

[alternative Senior Member Find all posts View Profile Close alternative]

Hope this is right ...... http://www.startupsmart.com.au/finan...rget-smes.html


"The reform will only apply to vehicle contracts established after May 10, 2011 and will be phased in over a period of four years. The statutory rate for travelling over 40,000 kilometres a year will increase from 10 cents this year to 13 cents in 2012 and 17 cents in 2013, before being standardised across the board at 20 cents from 2014."