Company car crackdown

[Wortho]

I've always thought the current novated lease tax rules were irresponsible for a government who should be encouraging people to drive their cars less not more to save tax.
Looks like the rules are about to change and there will be less incentive to get the km's up.
http://smh.drive.com.au/motor-news/company-car-crackdown-20110505-1eag8.html

I have heard all kinds of stories such as public servants driving around Canberra aimlessly at the end of financial year to get there km's up.
I know one bloke from work who used to drive from Sydney to the roundabout at Hexham go around it and back to Sydney without stopping just to get the km's up to lower his tax.
Another guy who looks for people going interstate to drive his car to get the km's up.
Sorry for those who will be disadvantaged by the changes but the current rules are crazy considering all thats going on regarding protecting the environment, carbon credits etc.

The fuel companies are going to be upset as there will be a drop in fuel used for sure if these changes go in, especially when we are talking 570,000 cars using the scheme.

[D4D]

Yet another way to reduce your gross pay gone. Bugger the fuel companies, this will hit the car industry big time and the many small businesses who support them. Not a very well thought out saving as it will cost jobs.

[darren]

My car is old school luckily. They just buy it, give it to me, i drive it, in a couple of years i give whats left back..

[oldblade]

Novated leases stopes being viable ages ago I have bought my last 3 cars higher purchase and claimed depreciation instead

Wonder how long it will be till they crack down on that one

[StevenM]

My car is old school luckily. They just buy it, give it to me, i drive it, in a couple of years i give whats left back..

Mine is the same but you still get the FBT amount shown on your group cert,

Hey I am a rep and do a least 50 k a year and have done for the last 15 plus years.Still effects your tax bracket and any govenment handouts that they hand out

[2 Brutal]

I lease my cars, do what I want to them, drive them as much or little as I like and clamin 100%, all legit when you own a 4wd shop.

[schmik]

hahaha too funny. Crack down on cars... but negative gearing of property? Nah!

I live in Shitney... if i had to buy my house now i couldn't afford it. Give the people a break Juliard!


mike

[reads90]

My car is old school luckily. They just buy it, give it to me, i drive it, in a couple of years i give whats left back..

Yeah same here, but novated lease is no good for me as I do too many k's a year. About 60- 70,000 a year. So more than happy to have a car given to me and I give back when done  , but that is what happens if your area is Qld and down to Coffs Harbour.

[speewa158]

If you drive more so use more fuel , service , roads & contribute to carbon emmitions where do we save the enviroment or is it just our pockets we fill . Im not he only one that has troble understanding this 

[D4D]

Bob Brown the PM convinced Joooolia that if the govt increased the tax then people would drive less and therefore reduce emissions. Sure there is a small % of people who just make it to the next bracket but there is also a large % of people who have a legitimate need to drive big klms and hence get the tax break. We're in the 11% bracket so it will double out FBT payable, I'd hate to be in 7% bracket. As speewa mentioned less klms = less fuel = less tax for the govt. But the purple spotted fan tailed bower bird will have fresher air to breathe

[speewa158]

Thats if some bastard dosent run it over in the rush to rack up the spendings/savings on their tax savings 

[mikew]

No more new cars for me, just watch the price of second hand cars go up as the market dries up. I do between 28-30K per year so it has always worked for me, now I will just run my old car till it dies, still doing 28-30k per year just not as efficiently and with more pollution than a newer car.

[crackacoldie]

Just another hit for those of us who live and work in the bush.  Juliar, there are people in Australia outside of Sydney and Melbourne!!!!!!

[DANBRI]

I was just about to go novated... Might wait a bit more and see.

[4wd26]

Was about to replace my novated vehicle- which is due out in July- with another
Nice while it lasted- but the tax rates and now FBT will no longer make this worthwhile- it was marginal ATM anyway.

I was always able to meet the kms required just do 10,000kms of camping trips a year- get out and see the country.

lucky for me it has happened now and not next year when I would have been in a 3 year contract.
Its going to hurt.....

[D4D]

Found this

Currently, the sliding FBT scale rewards employer-provided cars that are driven further. However, this sliding scale will be replaced with a single 20% flat rate that applies regardless of the distance travelled.
 
The reform will only apply to vehicle contracts established after May 10, 2011 and will be phased in over a period of four years. The statutory rate for travelling over 40,000 kilometres a year will increase from 10 cents this year to 13 cents in 2012 and 17 cents in 2013, before being standardised across the board at 20 cents from 2014.

[Pete_R]

Was about to replace my novated vehicle- which is due out in July- with another
Nice while it lasted- but the tax rates and now FBT will no longer make this worthwhile- it was marginal ATM anyway.

I was always able to meet the kms required just do 10,000kms of camping trips a year- get out and see the country.

lucky for me it has happened now and not next year when I would have been in a 3 year contract.
Its going to hurt.....

10,000kms per year....... I think you will now find that the new rates are more beneficial for you as previously the rate was 26% for less than 15,000 kms pa but this will now reduce to 20%

[garbage]

I'm with you Wortho.  Higher mileage = less tax makes no sense whatsoever.  I've also heard similar stories.  The guy next to me at work does the same trip up to the roundabout at Hexham regularly.  Hopefully this change will reduce the amount of traffic on the road.  My 25 minute daily commute now takes 45 minutes each way.

[4wd26]

10,000kms per year....... I think you will now find that the new rates are more beneficial for you as previously the rate was 26% for less than 15,000 kms pa but this will now reduce to 20%

on top of the 15,000kms that was just general running around= total of over 25,000kms.

[4wd26]

The original idea of the sliding scale was to limit people from only doing 5 to 10,000kms in a year rorting the system by replacing a near new vehicle with limited kms and making a profit.

Flat rate I will have to check now- but the theory was to change over vehicles every year- claim the GST and fleet discount and onsell.
remember the church/ not for proffit vehicle scam a few years ago.

[darren]

In the coal industry it is quite normal for novated leases to be offered to wage earners as well as salary. I assume it would be similar to other industries. People usually owned better and newer cars than they normally would as there were tax benefits with it. The flow on affect of this would be new car sales and servicing. You only have to look at the size of the car dealers in mining centers. If the financial benefit of this ends then people wont do it, then they will keep their cars longer etc... Thus affecting a lot of other areas. From memory it was Keating that ended negative gearing only to re instate it once everyone sold their rental properties.
 So time will tell how the masses react to this.