My employer pays the running costs of the vehicle and the respective amount is deducted from my pre- and post-tax salary income. However, there is a settlement clause for the termination of the novated lease contract which reads as follows:
'when there is a net settlement amount payable by you to us, we will issue you with a tax invoice, and forward it to your employer for payment through its payroll system. However, the obligation to pay the tax invoice issued to you in respect of the net settlement amount remains your obligation; or'
That said, in my interpretation, this means that if my running costs are higher than estimated at the start of the contract (estimates for 10,000 km per year), I must pay the outstanding amount to the leasing company.
My question is: Does this make me eligible to claim expenses for the novated lease car?
From the ATO website, there is the following information which conflicts with my situation:
'You can't claim running costs for a car you use under a salary sacrifice or novated lease arrangement. In this situation the car is usually leased by your employer from a financing company, and your employer typically pays for the running costs and claims deductions. You can claim additional expenses, like parking and tolls associated with your work use of the car.'
In my interpretation, my employer isn't paying for the running costs, I'm paying through the payroll system. The really is that, instead of me paying the Lease company, my employer is transferring the money to them. In the end, I'm bearing all the costs.
Thank you!
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