Author: notmyfault(Initiate)Initiate 23 Oct 2024
The answer is simple:
https://www.ato.gov.au/law/view/document?DocID=SAV%2FFBTGEMP%2F00008).
- A car is a road vehicle powered by a motor (petrol, diesel, hybrid, or electric)
- designed to carry a load of less than one tonne
- and designed to carry fewer than nine passengers
If the above conditions are met, then it is classified as a car and can be a Car Fringe Benefit, you would need to go through the rest of the steps to workout the result.
However, since the ute's designed payload is 1,045 kg, it is not considered a car.
- Adding accessories to the vehicle, such as a tow bar to reduce the usable payload, does not change the designed payload. It only reduces the amount of usable payload remaining.
- Similarly, adding the driver and passengers would also reduce the remaining payload by their weight, but the vehicle's designed payload did not change.
To date, I have not had any success in reducing the payload.
It’s important to note that a novated lease benefits the employee, not the employer.
For the employee its PAYG and GST tax savings.
For the employer, it is administration heavy and at a zero financial cost (what they spend on your behalf (excluding GST) is recovered from your payroll).
If the ATO determines that the vehicle is, in fact, not a 'Car', and falls out from being a bona fide lease, your employer bears the Fringe Benefits Tax (FBT) liability, FBT is only paid by companies.
And... those payroll deductions - not the cost of the car - could become the basis for the 'Fringe Benefit'. Could mean instead of being 20% of the car's cost, the 'Fringe Benefit' could be based on the actual expenditure at 47%.
And that extra cost would be passed on to you.
Crossed fingers you got it all setup correctly.
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