Changes to FBT rules

[KW XRT]

Originally Posted by Luke Plaizier

If they had any brains, the FBT changes would only apply to imported cars, and FBT exemptions retained only for vehicles manufactured in Australia.


Lukeyson

Woow wouldn't be great.

We have 11 leased prado's at work and to be honest I'm sick of driving imported cars.Paying tax for 30 + years I don't get a tax system that allows company's to right off costs on imported vehicles as well as fuel and running costs.These are usually the same ones that whinge about the deficit.Over the years we've had at least 100 prado's it's embarrassing.Was funny in the gfc when they couldn't buy prado's for about 5 months.The tax system is so good that work was selling cars at auction for nearly what they paid for them and sometimes more.So well over due for a change.Would be nice just to have aussie cars novated but.

[PepeLePew]

Or is it a case of too late she cried for the Aussie tax break push? Hope not! Nah, would make too much sense...

[gtfpv]

Originally Posted by 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.

you dont get off a rape charge if you use a non-vaginal orifice.... why should the purchase method determine whether you get a tax break.

i see your point . but driving to work and back or paying for any transport to get to work and back has never sat right with me to be not considered a work related expense , and this includes tolls also . the fact that my wife and i pay over $240 PER WEEK TRAVELING TO AND FROM WORK . ANMD THAT NOT BE WORK RELATED REALLY HAS ME STUMPED . and that does not include wear and tear or rego , insurance or pruchase of vehicle . when i'm stuck in peak hour traffic everyday . that being considered private use of vehicle is insane !!! perspectives need to be looked at both ways .
novated leases took part consideration to these things . not for the private individual to make them happy , but for the jobs involved supplying new cars and employment it created australia wide .
its kind of like saying , using a different orofice for sex isnt really sex . cause the govt said it isnt . which BILL CLINTON WOULD STRONGLY AGREE WITH .

[KIWI-1]

Originally Posted by gtfpv

i see your point . but driving to work and back or paying for any transport to get to work and back has never sat right with me to be not considered a work related expense.

So how does it sit with you that you and your wife can't, but under the new rules a tradie still can?
edit
BTW Not having a go at tradies; just the stupidity of not fixing the system to have consistent rules.

[flappist]

Keep it civil guys.

[Brazen]

Victorian Premier to push for Aussie exemption

THE federal government's proposed changes to tax concessions for business-related vehicle use could cut Victorian car production by 10,000 units a year, the state government says.
Victorian Premier Denis Napthine wants Canberra to reconsider its "ill-conceived and precipitous policy change" saying the fringe benefits tax proposal poses a significant risk to the car manufacturing industry and component makers across the state.

"We urge that if the federal Labor government is not prepared to abandon this policy, it should at least consider reviewing the scope of the new application of the tax to exempt locally-produced cars," Dr Napthine said in a statement.

The premier said a preliminary analysis of the impact on the Victorian car manufacturing industry indicated the policy could cut production volumes for local car makers by 10,000 units a year, leading to falling demand for components across the entire supply chain.




Read more: http://www.news.com.au/breaking-news...#ixzz2ZNu756RT

[gtfpv]

Originally Posted by KIWI-1

So how does it sit with you that you and your wife can't, but under the new rules a tradie still can?
edit
BTW Not having a go at tradies; just the stupidity of not fixing the system to have consistent rules.

i am a tradie . but i work for an employer , i was once also self employed at the same time running my own small business on the side working for myself . 2 jobs at once .( which is self abuse and the poorest life on earth )
it sits well with me that a self employed tradie can buy a ute and pay no tax at all on the business vehicles complete costs .
it sat well with me that employees could novate a vehicle and pay distance based FBT for new cars only , and it sat well with me that some choose the cheapest option of all and buy an el falcon on lpg for 2 grand and drive to work .
i bought a brand new xr6 under a novated lease , to replace my el on lpg when i could , something i would never have done unless there were some small benifits , my intention was to continue this every 3 years , i thought well i'm buying australian . i'm buying new , something i otherwise wouldnt consider and i'm getting something for it and helping out car turnover . now that thats been fiddled with , i did not continue leasing and bought my xr6 instead of leasing again . i actually thought that most people would probably do the same as me and ford and holden might find themselves in trouble when the FBT went to a flat 20% rate . . i now am in the years i was pre lease , and that is i would not look at leasing and i would just buy an el falcon on lpg again .
cheers mate

you see no one really needs a new car for anything and that includes a business . if there are only tax benifits for big businesses , i'm sure they'll kick in to save australian manufacturing etc etc . we'll let the big end of town deal with these things - NOT

[zilo]

Originally Posted by gtfpv

i am a tradie . but i work for an employer , i was once also self employed at the same time running my own small business on the side working for myself . 2 jobs at once .( which is self abuse and the poorest life on earth )
it sits well with me that a self employed tradie can buy a ute and pay no tax at all on the business vehicles complete costs .
it sat well with me that employees could novate a vehicle and pay distance based FBT for new cars only , and it sat well with me that some choose the cheapest option of all and buy an el falcon on lpg for 2 grand and drive to work .
i bought a brand new xr6 under a novated lease , to replace my el on lpg when i could , something i would never have done unless there were some small benifits , my intention was to continue this every 3 years , i thought well i'm buying australian . i'm buying new , something i otherwise wouldnt consider and i'm getting something for it and helping out car turnover . now that thats been fiddled with , i did not continue leasing and bought my xr6 instead of leasing again . i actually thought that most people would probably do the same as me and ford and holden might find themselves in trouble when the FBT went to a flat 20% rate . . i now am in the years i was pre lease , and that is i would not look at leasing and i would just buy an el falcon on lpg again .
cheers mate

you see no one really needs a new car for anything and that includes a business . if there are only tax benifits for big businesses , i'm sure they'll kick in to save australian manufacturing etc etc . we'll let the big end of town deal with these things - NOT

Of course it makes sense for a self employed Tradesman to pay no costs in travelling to his jobs, especially with an unpredictable place of first call.

He starts from home so he has NO travelling to workplace costs.

He is already at his workplace.

A tradesman working for a company isn't a business...just a worker same as the cleaner....not entitled to claim from home to work.

If anyone wants a piece of THAT action then start your own business.

But if you want to prance around in a suit all day and only use your car to work and home and not carry tools then pay the tax.

So sick of tax cheats who think just cause they have got away with it for so loooong that they have an entitlement to me paying for their fringe benefits.


Give me more hospitals, schools and cheaper electricity instead of financing some soft cocks trophy novated showpiece.

[djjase]

That's right. I have worked for a PBI not-for-profit and we were able to claim $16,000 tax free, half my rent and then mortgage was tax free as we could claim remote housing being in Regional towns, I could claim others thing too.

You have to remember that most of these are on lower salaries and in remote regional area's this is the big thing that makes people want to work in these areas as it makes a $40k job worth the same as it is being paid in the bigger cities.

I believe that the Feds have been talking about dropping this as well.

The Govt could save more money by halving the PM salary and all the MP, what about all of the junkets - the amount of money wasted is a joke.

How about the millions we pay to all ex PM's? they get free travel, a car, staff, office and so much more.

Originally Posted by KIWI-1

Why not remove these rorts as well?

Tax-free items
Employees of public hospitals, private not-for-profit hospitals or a Public Benevolent Institution don't have to pay the Fringe Benefits Tax on a whole lot of items that would normally incur FBT!
If you are a hospital or PBI employee you can package any combination of these items, but keep in mind there’s an annual limit to how much you can spend. To find out your limit, call us on 1300 476 278.
Living expenses card
Imagine buying almost anything you want with a debit card that makes your own pre-tax dollars available to spend anytime, anywhere.
Loan and mortgage repayments
Have you got a personal loan or mortgage? Cut down the expense by packaging a portion of your repayments tax-free!
Rent
Rental prices might be on the rise, but you’ll see huge savings if you’re paying some of your rent from tax-free dollars.
Credit card payments
Why not use your tax-free dollars to make credit card repayments?
Bills and more
Want more options? There are so many things you could pay for with your tax-free dollars. Take a look and see where you can save.

Smartsalary Meal Entertainment Card
Let us know how much you’d like your employer to regularly set aside from your pre-tax salary every pay period. We’ll transfer those funds to your Meal Entertainment Card.
You can use the card with your family, friends or colleagues if you’re dining at a restaurant or café, eating in at a fast-food restaurant or buying dinner at a club or pub.
Basically it’s a Visa debit card that gives you access to your own pre-tax dollars. All you have to do is present the card at the end of the meal to make a payment. Just swipe, sign and save – it’s that simple.
Only available to employees of a public hospital, private not-for-profit hospital, aged care facility, public ambulance service or ATO approved charity*.

http://www.smartsalary.com.au/

[KIWI-1]

Originally Posted by zilo

Of course it makes sense for a self employed Tradesman to pay no costs in travelling to his jobs, especially with an unpredictable place of first call.

Don't have a problem with that but why should this be FBT exempt?
"An electrical company employee takes the company van (carrying capacity of less than one tonne) home each night because there is no security at the company premises. The only non-work-related use during the FBT year was a trip to pick up some furniture and take it to the employee's home – this use of the van would be exempt from FBT."

[paulb351]

Originally Posted by DASH GT

$8,000 in FBT? Don't you mean $3,720 in FBT?

the 20% is the taxable rate.

46.5% of that is the tax payable.

Half right dash, the taxable value is 20% of the value of the car when purchased less rego etc and applies for 4 years so the 8k is then grossed up (nearly 2 is the gross up factor) and then tax is applied to the grossed up value. The maths means the fbt payable is just a little under 8k in the example used. Leasing has just gone from a 'Rort' as some badly informed commentators are calling it of about $300 per year saving to a whole lot more costly with more tax added on.

This will kill salary packaging of vehicles

For all those saying my car is 100% work remember travel fr home to work is considered private travels king log book method only viable for travelling salesmen who go home once a month! Or there abouts

[paulb351]

Originally Posted by KIWI-1

Don't have a problem with that but why should this be FBT exempt?
"An electrical company employee takes the company van (carrying capacity of less than one tonne) home each night because there is no security at the company premises. The only non-work-related use during the FBT year was a trip to pick up some furniture and take it to the employee's home – this use of the van would be exempt from FBT."

Driving vehicle home for storage is considered private use so you would need to pay fbt on that travel

[KIWI-1]

Originally Posted by djjase

That's right. I have worked for a PBI not-for-profit and we were able to claim $16,000 tax free, half my rent and then mortgage was tax free as we could claim remote housing being in Regional towns, I could claim others thing too.

You have to remember that most of these are on lower salaries and in remote regional area's this is the big thing that makes people want to work in these areas as it makes a $40k job worth the same as it is being paid in the bigger cities.

I believe that the Feds have been talking about dropping this as well.

True that some are on lower salaries (often the minimum wage), but it covers plenty who are not. For example the most common category of paramedics in Victoria earn $93,000 a year, including overtime and penalties.
The Cap for Public Hospital, Ambulance, Legal Aid is $17,000; Charity, Medical Research, Aged Care is $30,000 and their is no limit on the meal and entertainment card.

I doubt that the Feds will drop it because the Nurses, Paramedics Unions etc. have so much sway with the Labor Party.

[KIWI-1]

Originally Posted by paulb351

Driving vehicle home for storage is considered private use so you would need to pay fbt on that travel

I took that straight from the ATO website. Hence my earlier comments about not fixing the system to have consistent rules.

[b0son]

Originally Posted by gtfpv

i see your point . but driving to work and back or paying for any transport to get to work and back has never sat right with me to be not considered a work related expense , and this includes tolls also . the fact that my wife and i pay over $240 PER WEEK TRAVELING TO AND FROM WORK . ANMD THAT NOT BE WORK RELATED REALLY HAS ME STUMPED .

I agree with you on that. At first glance, it makes no sense that one government department does not consider this a work trip (ATO), but another does (WorkCover). Then again, it should be no surprise... the ATO's policy ensures more tax revenue, WorkCover's ensures the cost is passed onto business.

[b0son]

Originally Posted by KIWI-1

True that some are on lower salaries (often the minimum wage), but it covers plenty who are not.

+1

Since when is it the role of tax policy to help specific industries be competitive?

Further, consider how money is spent in an NFP... lavish lunches, travel, phones, laptops, etc etc. Said employees are often on the receiving end of some very nice perks.

Is an organization that does charitable work that much more valuable to the community than one which provides employment? Give a man a fish versus teach a man to fish and all that....

[KIWI-1]

Originally Posted by b0son

Further, consider how money is spent in an NFP... lavish lunches, travel, phones, laptops, etc etc. Said employees are often on the receiving end of some very nice perks.

+1
In 2010 the Productivity Commission estimated 600,000 NFPs registered.

[jimmyxr6t04]

A little off topic; However, there's quite a bit of angst in here... It almost appears as though a lot of the business owners are jealous of the fact that a public servant can save a little tax and drive a new car?

My brother in law earns about 60k per year, but is lucky to pay 3k in tax... I earn double that, but pay in excess of 30k in tax and that is with my little 'perk' of a novated lease car... Thankfully, i also have an investment property so it won't quite be 30k this year...

I get sick of tradie mates telling me that they pay for my car and my job etc... when in fact, my 30k tax also helps them get away with paying 3k tax and claiming all kinds of fruitful things (some legit, some not)...

Instead of the wife and I leasing two news cars every 2-3 years, i'll simply have the wife salary package as much as she's allowed into the mortgage. I'll pay cash for my cars from now on, it just means i won't be enticed to upgrade as often.

This might be a blessing in disquise for me... I'll probably pocket an extra $700 net each fortnight, so i might go buy another investment property to reduce my tax a lot more than my car does. Heck, the wife is a hairdresser by trade... I might even start up a mobile hairdressing business on the side and see what sort of tax deductions i can get from that... Home office, car, etc...

Plenty of ways to reduce tax, a novated lease allowed me to have a car that i wanted, and save a little tax at the same time... was a win-win for everyone. If i have to pay cash for my car now, with no tax benefit, i'll start looking at other avenues to reduce my tax.

[Bulletime]

^^^ this!

[vanman_75]

Its a bit strange how people can't or don't understand , I will not be buying a new car , the government will not get more tax from me , you are not paying more tax to subsidize my buying habits , it only lowers my tax IF I buy a new car ...with this change a lot less people will buy new cars ...its like a toll road it only makes money if people actually use it ...if I don't buy new they miss all taxs and costs , car sales take a hit jobs etc , one big circle of loss ...

[Bulletime]

^^^ and this!!!

[ute83]

Originally Posted by vanman_75

Its a bit strange how people can't or don't understand , I will not be buying a new car , the government will not get more tax from me , you are not paying more tax to subsidize my buying habits , it only lowers my tax IF I buy a new car ...with this change a lot less people will buy new cars ...its like a toll road it only makes money if people actually use it ...if I don't buy new they miss all taxs and costs , car sales take a hit jobs etc , one big circle of loss ...

Makes you wonder if Govco modelling has taken this into account.

[WPR1]

Exactly - raising taxes very often results in less tax revenue because people do something else with it - just look at the mining tax, mining has been shelved until their is a change.
Just another example of policy on the run from this incompetent desperate government.
Please call an election soon!

[MAD]

I love when people who invest in things and claim the costs against their tax, then try to justify it as doing a favour for everyone else. Houses for rent, keeping car turnover going.

And geez having a sook on paying to get to work. Are you effin serious?! Where were my deductions for driving an hour and a half to uni everyday? If you don't like tolls, leave home earlier or find another job that is closer to home.

[gtfpv]

Originally Posted by MAD

I love when people who invest in things and claim the costs against their tax, then try to justify it as doing a favour for everyone else. Houses for rent, keeping car turnover going.

And geez having a sook on paying to get to work. Are you effin serious?! Where were my deductions for driving an hour and a half to uni everyday? If you don't like tolls, leave home earlier or find another job that is closer to home.

typical young sprog statement mate . we were paying taxes and driving to work on the same roads for free not so long ago and our tax dollars were paying for your uni .
then a few decades later a few uni sprogs think that we should pay everything which tax was origionally designed to pay for . your out of your leaugue buddy , and i would say your an obvious pushover and will go down smiling as if your sucking on a lollipop .
you'd probably fall out of your chair if your mum charged you to watch foxtel , which was once commercial free , and before that we watched everything for free .
our govt has pretty much finished our car industry overnight , and here you are blaming the people for it as if it was thier fault . its people with this mentality that pretty much allow themselves to be morally raped and allw themselves and everyone else to go down with em .

[gtfpv]

double post

[MAD]

I don't even need bite at that. You've done enough damage to your own image.

I live in a little place called reality, where it costs us to do things. In a place where if you can't afford things, you don't get them. I don't have the biggest house, I don't have a new car, I don't have foxtel. Why? They're unnecessary luxuries. I am comfortable in my world and sleep very well at night.

[gtfpv]

Originally Posted by MAD

I don't even need bite at that. You've done enough damage to your own image.

I live in a little place called reality, where it costs us to do things. In a place where if you can't afford things, you don't get them. I don't have the biggest house, I don't have a new car, I don't have foxtel. Why? They're unnecessary luxuries. I am comfortable in my world and sleep very well at night.

yeah me too mate . and i deserve everything i get and you get , because i stand and participate in making them happen . you wouldn't even know why you have freedom dude .

[MAD]

I'm not going to go back and forth with you, no point.

I will say though, you really need to know someone before you judge them.

[gtfpv]

Originally Posted by MAD

I'm not going to go back and forth with you, no point.

I will say though, you really need to know someone before you judge them.

ok mr if you cant afford electricity turn the lights off and dont worry . sweet as .