Changes to FBT rules

[Brazen]

Certainly the FBT changes are here to stay in my opinion, even the opposition have not said they would overturn it.

What may be fiddled with is the details. Maybe a slow transition over the next few years - or as I hope, Australian made exemption to the cut. Ford would probably start selling 40,000 Falcons, 40,000 Territories and 20,000 Falcon utes a year if that was the case.

[BroadyFord]

Originally Posted by Brazen

Certainly the FBT changes are here to stay in my opinion, even the opposition have not said they would overturn it.

What may be fiddled with is the details. Maybe a slow transition over the next few years - or as I hope, Australian made exemption to the cut. Ford would probably start selling 40,000 Falcons, 40,000 Territories and 20,000 Falcon utes a year if that was the case.

Why would there be an Australian-made exemption? The majority of leased cars are Australian-made and hence exempting them would be akin to making negligible changes to the FBT.

[imugli]

Originally Posted by ILLaViTaR

My neighbour owns a window trade he inherited from his parents. He has claimed a Holden grange, 90k+ BMW (wifes) and a 4x4 ute (must be doing windows in bunyip state forest).

Now he has appointed his wife as the "company director" to the business and as far as the ato is concerned she works full time hours from home... Well reality check she's a housewife who sits in the pool outside (probably a tax deduction too somehow) sunbaking all day while the BMW and grange sit in driveway everyday depreciating away but then of course depreciation on such a high asset is nullified to them obviously as the depreciation is probably flat rate or some crap so they pull more tax back from a vehicle with a greater depreciation). I'm sure this is highly illegal particularly the company director housewife front, however everyone does it (that's the mentaility).

It's actually not illegal and it's available and accessable to anyone who cares to take the time to a. educate themselves on the tax benefits of different financial structures (companies, trusts, sole traderhips, partnerships etc). and b. employ an accountant to implement them for you.

It costs a few hundred $$ to set up a company, yourself, from your lounge room, over the internet. It costs about $1000 to get your accountant to set up a trust for you. Both have advantages and disadvantages when it comes to earnng an income in them or holding assets in them, and everyone's situation is different, but in general they are a more tax effective way of doing these things.

People who take advantage of these rules (myself included) are not tax dodgers, we simply don't want to pay any more tax than we have to. That is not a crime. If the government wishes to change those laws, that's fine by me, I have no problem with it. I've enjoyed the benefits while they've lasted and I'll take my vote elsewhere if I feel I'll get a better deal for it.

As far as this FBT cutback is concerned though, I'd be more concerned about the a*** end falling out of the car market, the jobs it would cost and the amount of LCT it will cost them rather than the amount it will save them up front. This will have long term effects.

[Brazen]

Originally Posted by BroadyFord

Why would there be an Australian-made exemption? The majority of leased cars are Australian-made and hence exempting them would be akin to making negligible changes to the FBT.

I think there is confusion in who this affects.

There are fleet cars which are used for work and there are user-chooser novated leases which have no business use.

I could be wrong but I dont think fleet cars are in danger, as they are tools of the trade and if they werent needed then companies would of slashed them a long time ago. So Telstra will still buy Commodore wagons and Hertz will still buy Falcon XR6s.

What this really does affect is the Novated Lease user-chooser who has no business use for their car: The office worker, the IT guy, the public servant, the high-school teacher. These vehicles are registered in the individual's name and these affect imported cars big time. Apparantly 30% of Mazda 3s are salary sacrificed, and most Mercedes under $75,000 are as well, my neighbour salary sacrifices a Toyota Kluger a colleague a Hyundai Santa Fe. 90% of vehicles sold in Australia are imported, this percentage would probably be similar to the Novated Lease user chooser. Im sure it will effect local cars, but it will also affect a lot of imported.

Just my thoughts which seem to go against what Holden and Toyota are saying.

[KIWI-1]

Originally Posted by imugli

It's actually not illegal and it's available and accessable to anyone who cares to take the time to a. educate themselves on the tax benefits of different financial structures (companies, trusts, sole traderhips, partnerships etc). and b. employ an accountant to implement them for you.

Doesn't apply to wage & salary earners though.

[vztrt]

Originally Posted by Brazen

I think there is confusion in who this affects.

There are fleet cars which are used for work and there are user-chooser novated leases which has no business use.

I dont think fleet cars are in danger, as they are tools of the trade and if they werent needed then companies would of slashed them a long time ago. So Telstra will still buy Commodore wagons and Hertz will still buy Falcon XR6s.

What this really does affect is the Novated Lease user-chooser who has no business use for their car: The office worker, the IT guy, the public servant, the high-school teacher. These vehicles are registered in the individual's name and these affect imported cars big time. Apparantly 30% of Mazda 3s are salary sacrificed, and most Mercedes under $75,000 are as well.

It would be interesting what happens to duel cab utes.

[MickyB]

Originally Posted by vztrt

It would be interesting what happens to duel cab utes.

Have a look here for 2012 build dual cab utes that can be FBT exempt. http://www.ato.gov.au/General/Fringe...ufactured_2012

Here is some info on eligibility for the FBT exemption. http://www.ato.gov.au/General/Fringe...ility_criteria

Most tradies will still have an FBT exemption for their work utes, this new legislation will have a much greater effect on 'user-chooses' packaged vehicles.

[imugli]

Originally Posted by KIWI-1

Doesn't apply to wage & salary earners though.

And if you're happy being a wage or salary earner all your life, with no investments and no assets, that's fine. Otherwise it applies to everyone who wants to invest in anything at any point in time in the future.

[Brazen]

Jeff Kennett on the radio this morning has been pushing for an Australian-made exemption to the FBT changes. There is some momentum there.

[gtfpv]

Originally Posted by Brazen

I think there is confusion in who this affects.

There are fleet cars which are used for work and there are user-chooser novated leases which have no business use.

I could be wrong but I dont think fleet cars are in danger, as they are tools of the trade and if they werent needed then companies would of slashed them a long time ago. So Telstra will still buy Commodore wagons and Hertz will still buy Falcon XR6s.

What this really does affect is the Novated Lease user-chooser who has no business use for their car: The office worker, the IT guy, the public servant, the high-school teacher. These vehicles are registered in the individual's name and these affect imported cars big time. Apparantly 30% of Mazda 3s are salary sacrificed, and most Mercedes under $75,000 are as well, my neighbour salary sacrifices a Toyota Kluger a colleague a Hyundai Santa Fe. 90% of vehicles sold in Australia are imported, this percentage would probably be similar to the Novated Lease user chooser.

Just my thoughts which seem to go against what Holden and Toyota are saying.

that is absolutely who it affects BRAZEN . and well said .
if we break it down into real simple terms . it effects manufacturing and turnover of cars , and every aspect of manufacturing and employment related to it .
Obviously people will boast that people dont deserve tax benifits for a novated lease because they arent special enough people for whatever reasons those up themselves will choose .
but the real picture is . IT PUTS PEOPLE IN AUSTRALIA OUT OF JOBS , AND TURNS AUSTRALIA INTO A BIGGER WAREHOUSE FULL OF DUMMIES , WITH A SNOWBALLED EFFECT , where capitalists rule everyone else and that is really anti labor . thats the sort of thing i expect from the libs . therefore i'm against labor doing it .
but aside from politics . the bigger picture is . we australians will all go a little bit further backwards from this .

[MAD]

Going backwards a bit may not be a bad thing.
There's too much "everything must increase everywhere" (profit, turnover, volume, etc.) in the world.

[gtfpv]

Originally Posted by MAD

Going backwards a bit may not be a bad thing.
There's too much "everything must increase everywhere" (profit, turnover, volume, etc.) in the world.

i understand your comment . but try and get woolworths , wallmart , kmart , and those who run the oil industries to agree with you. i can tell you they like thier dollar more than you do and people die for the cause . if they agree with you you can bet one of you will be paying more or going without a bit and the other will not . anyideas if it will be you or them ?

[KIWI-1]

We will have at least 3 sets of FBT rules:
1. Tradies who can claim FBT exemption going to and from work.
2. Salary & wage earners who cannot claim FBT exemption going to and from work.
3. Employees of public hospitals, private not-for-profit hospitals or a Public Benevolent Institution who don't have to pay the Fringe Benefits Tax on a whole lot of items that would normally incur FBT! (See http://www.fordforums.com.au/showthread.php?p=4814155#post4814155)

[strobe]

I doubt even 10% of the novated cars at my large company are used for anything other than driving to and from work, while the individuals catch taxis from the office to our clients. I would hazard a guess that some don't even make it into the office and are instead left in the capable hands of the other half.

[Guzz226]

Lets take a step back.

The changes to FBT are to plug an income hole by switching from a Carbon Tax to the ETS which drops income.

Maybe the other way to address this widening "carbon" income-expense gap could be for the Government to drop all the Carbon welfare-rebate (bribes).

Or would that be just too darn simple?

[gtfpv]

Originally Posted by strobe

I doubt even 10% of the novated cars at my large company are used for anything other than driving to and from work, while the individuals catch taxis from the office to our clients. I would hazard a guess that some don't even make it into the office and are instead left in the capable hands of the other half.

yes we know . people regularly bring your points up time and time again , and your probably right . but how does that relate to this thread . what is the point your trying to make ?
i think your trying to say . that its wrong that people were given these tax breaks in the 1st place . and therefore its right to remove the tax incentives and when the producers of these cars and all indirectly related industries go down the gurgler from loss of sales happen then tuff luck . justice has been done .
because i have a chip on my shoulder , and i cant get past the thought that those of you that say this are really trying to say what i've just said .
we always seem to turn a statement into vague words . if we only just kept real that a spade is always a spade.
mate correct me if i'm wrong . your every bit entitled to your opinion just as i am with my hard opinions .
cheers .

[strobe]

I wasn't making a point, I was making an observation.

[gtfpv]

Originally Posted by strobe

I wasn't making a point, I was making an observation.

well lets just say that many people make the same observations all the time in regards to this , perhaps the politicians made the same observations and pulled the novated fbt benifits ?
and you see it is a little important , do we back the govt on this , or do we rise up and oppose this . either by changing your vote . making a point of it in the media , letting it go . because at the end of the day .. the real way is the way the people ( majority allow ) people have forgotten that they rule as a whole . not what they are told .
just written words thats all , and a good car related topic . for car enthusists .

[Charliewool]

Do the pollies and their spouses pay FBT on their Government supplied vehicles?

[Dr Smith]

Originally Posted by Charliewool

Do the pollies and their spouses pay FBT on their Government supplied vehicles?

I think the term is they are "heavily subsidised"...translation..."out of pocket bugger all"...

[Dr Smith]

Originally Posted by gtfpv

well lets just say that many people make the same observations all the time in regards to this , perhaps the politicians made the same observations and pulled the novated fbt benifits ?
and you see it is a little important , do we back the govt on this , or do we rise up and oppose this . either by changing your vote . making a point of it in the media , letting it go . because at the end of the day .. the real way is the way the people ( majority allow ) people have forgotten that they rule as a whole . not what they are told .
just written words thats all , and a good car related topic . for car enthusists .

I share your thoughts ...I think one bigger issue is better laws need to be created, leaving less loopholes, and maybe if lower tax rates applied, with less complication and minimal or no exemptions allowed then maybe people wouldn't spend thousands to save even more thousands. We could go back to just regular spending and growing our domestic economy which benefits everyone. My wife had a business partner that had spread sheet after spread sheet looking at costs for everything and anything, so much so that good old sales effort was handicapped. Me, I'd rather go pick-up my daughter from school, buy her a treat (& me, lol) on the way home and work out how to keep Buddy at Hawthorn.

[Jason[98.EL]]

how does this affect the likes of a person that needs the vehicle for their carers roll

ie .. My sister is the carer for her handicapped son ( needs wheelchair 60% of the time )

they have an i-max for room ie the wheel chair fits in the space at the back

will these changes affect their lease or do they get an exemption due to it being needed for transport for him ( he is at school 5 days a week so the car is not used for him during those times )

thanks

Jason

[Outbackjack]

I wonder how this will effect Novated leases that are done using the ECM calculation. I took out a Lease back in November 2012 on a new Nissan Patrol using ECM.... I dont pay FBT at all and I have no set kilometers to do each year..... From what I can gather it will be business as usual for this lease but after that I will take a long hard look at how this pans out. There is no way I would buy a new car unless through the leasing system. My guess is that there are many that will look at it the same way.

[Outbackjack]

Originally Posted by Jason[98.EL]

how does this affect the likes of a person that needs the vehicle for their carers roll

ie .. My sister is the carer for her handicapped son ( needs wheelchair 60% of the time )

they have an i-max for room ie the wheel chair fits in the space at the back

will these changes affect their lease or do they get an exemption due to it being needed for transport for him ( he is at school 5 days a week so the car is not used for him during those times )

thanks

Jason

Write a letter to you local member and tell them very firmly of the situation. Then write to the press if you get ignored... As you probably will be.

[KIWI-1]

Originally Posted by Jason[98.EL]

how does this affect the likes of a person that needs the vehicle for their carers roll

Hopefully your sister lives near you because Disability Care should look after your nephews needs.

[ivorya]

I think they'd save even more money if large mining companies weren't allow to get their fuel for free, as a tax right off.

But that's for another thread....

[b0son]

the only reason this situation exists is because for some reason, leasing a car can be done with tax advantages. this never made any sense to me for a *private* asset. the method of purchase should not determine an asset's taxation status, only its usage.

[Jason[98.EL]]

Originally Posted by KIWI-1

Hopefully your sister lives near you because Disability Care should look after your nephews needs.

yep she does literally just around the corner approx 500 mtrs away

[MickyB]

Originally Posted by Outbackjack

I wonder how this will effect Novated leases that are done using the ECM calculation. I took out a Lease back in November 2012 on a new Nissan Patrol using ECM.... I dont pay FBT at all and I have no set kilometers to do each year..... From what I can gather it will be business as usual for this lease but after that I will take a long hard look at how this pans out. There is no way I would buy a new car unless through the leasing system. My guess is that there are many that will look at it the same way.

Your employee contribution would have been based on 20% of the value of the vehicle (stat method), so for the next lease your employee contribution will be calculated using the operating cost (log book) method.
The log book method calculates the employee contribution by applying the personal use % to the total running cost of the vehicle.

[BroadyFord]

NLC has just announced it will be laying off 80 out of its 150 staff tomorrow.

That's 180 jobs lost so far in VIC this week alone thanks to the FBT changes.