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Surm(Initiate)Initiate
26 Feb 2024

Hi,


I have an EV with a novated lease through my employer.

The EV is for private use and is not used for income-producing work.


QUESTION: Is it allowed to deduct the home EV charging costs at 4.2 cents per KM as an operating expense for an EV that is on a novated lease and not used for income-producing work?


I have been told by someone that, even though the EV is on a novated lease, since it not producing income, the home EV charging costs cannot be deducted as an expense. This statement doesn't sound right to me because all other maintenance expenses of the EV are deductible as expenses.


Can an ATO customer support officer clear this up?


Thank you

6,151 views
8 replies
6,151 views
8 replies

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Most helpful reply

Bruce4Tax(Taxicorn)Taxicorn
26 Feb 2024

Is it allowed to deduct the home EV charging costs at 4.2 cents per KM as an operating expense for an EV that is on a novated lease and not used for income-producing work?


You cannot deduct any car expenses for a car under novated lease - see sec 51AF.


http://classic.austlii.edu.au/au/legis/cth/consol_act/itaa1936240/s51af.html


But you can report the expenses to your employer in order to reduce the fringe benefit value.



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Most helpful reply

Bruce4Tax(Taxicorn)Taxicorn
26 Feb 2024

Is it allowed to deduct the home EV charging costs at 4.2 cents per KM as an operating expense for an EV that is on a novated lease and not used for income-producing work?


You cannot deduct any car expenses for a car under novated lease - see sec 51AF.


http://classic.austlii.edu.au/au/legis/cth/consol_act/itaa1936240/s51af.html


But you can report the expenses to your employer in order to reduce the fringe benefit value.



Surm(Initiate)Initiate
27 Feb 2024

Hi @Bruce4Tax,


When a car is on a novated lease, the operating costs of the car, for example, the cost of insurance and servicing, are deducted as expenses from the pre-tax salary of the employee.


My question is, can the home EV charging costs estimated at 4.2 cents per KM be reported to the employer to be deducted as an expense from the pre-tax salary when the EV is on a novated lease.


When I said "deduct", I did not mean for deduction under my personal tax. I meant deduction as an operating expense along with all other standard expenses (such as tyres, servicing, insurance etc) that are deducted from pre-tax earnings as a part of the novated leasing arrangement

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