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UNSW
Novated Leasing and Salary Packaging User Guide
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It’s easier to leaseplan
Table of Contents
Introduction to SalaryPlan and Salary Packaging Administration 3
Reading this guide ______________________________________________ 3
What is salary packaging? ________________________________________ 3
Eligibility for salary packaging _____________________________________ 3
Benefits available to me __________________________________________ 4
Seeking financial advice __________________________________________ 4
Commencing salary packaging _____________________________________ 4
SalaryPlan’s role in salary packaging ________________________________ 4
SalaryPlan fees ________________________________________________ 4
Contacting LeasePlan and SalaryPlan _______________________________ 5
GST__________________________________________________________ 5
Luxury tax _____________________________________________________ 5
Packaging account deficit collection _________________________________ 6
Ceasing a lease vehicle __________________________________________ 6
On-line employee reporting _______________________________________ 6
New employee benefit ___________________________________________ 7
Existing employee benefit _________________________________________ 7
SalaryPlan calculator ____________________________________________ 7
Motor Vehicle Leasing _________________________________ 8
What is a novated lease __________________________________________ 8
Who is eligible for a novated lease__________________________________ 8
How does novated leasing work ____________________________________ 8
What type of vehicles can be leased ________________________________ 8
The benefits of a novated lease ____________________________________ 8
What happens if your employment is terminated _______________________ 9
What are the possible risks of novating a vehicle with LeasePlan? _________ 9
Deciding on your vehicle ________________________________________ 10
Residual value and ATO guidelines ________________________________ 10
Sourcing of new vehicles ________________________________________ 11
Financing second-hand vehicles __________________________________ 11
How are trade-in vehicles handled _________________________________ 12
To obtain a quote on a vehicle ____________________________________ 12
Information provided in the lease quote _____________________________ 12
Lease payment ________________________________________________ 13
Maintenance and repairs ________________________________________ 13
Tyres, batteries and windscreen replacement ________________________ 14
Registrations and CTP __________________________________________ 14
Roadside Assistance ___________________________________________ 14
Fuel _________________________________________________________ 14
Miscellaneous Operating Cost (previously called Other Provisions) _______ 14
Replacement car (if chosen) ______________________________________ 14
Comprehensive insurance _______________________________________ 15
Regular reporting ______________________________________________ 15
FBT tracking services ___________________________________________ 15
Variations to operating costs _____________________________________ 15
LeasePlan | Confidential i
Salary Packaging User Guide
It’s easier to leaseplan
Incorrect estimate of travel _______________________________________ 16
To claim ‘out of pocket expense’ reimbursement ______________________ 16
Expiry of the contracted lease term ________________________________ 16
Failure to advise end of lease option fee ____________________________ 16
Corporate CarPlan involuntary redundancy (Contract 58) _______________ 16
What is the Corporate CarPlan Involuntary Redundancy facility __________ 16
Costs ________________________________________________________ 17
Availability ____________________________________________________ 17
How FBT affects your package costs _______________________________ 18
New FBT statutory percentage rates post budget 2011 _________________ 18
Effects of distance travelled on FBT (protected rates only) ______________ 18
Days unavailable ______________________________________________ 19
FBT declarations your obligations _________________________________ 19
The employee contribution method (ECM) ___________________________ 20
Creating a quote with LeasePlan __________________________________ 20
Commencing salary packaging for a novated lease ____________________ 21
End of lease __________________________________________________ 21
Leaving employment ____________________________________________ 21
SalaryPlan – Welcome letter _____________________________ 23
SalaryPlan – Salary packaging employee application ____________ 24
SalaryPlan – Novated lease benefit form _____________________ 25
SalaryPlan - Motor Vehicle Declaration ______________________ 26
LeasePlan | Confidential ii
Introduction to SalaryPlan and Salary
Packaging Administration
This document should be read in conjunction with your employer’s salary packaging policy
Your employer has introduced salary packaging as an option for all eligible employees to tailor the mix of salary/wages and benefits to best suits your individual needs.
Salary packaging is simply a way for employees to reduce salary or wages and in exchange receive benefits provided by your employer. When the various Australian taxation laws are applied, this salary packaging approach can be tax effective and beneficial to you because it gives you;
•
Potentially increased net value of your remuneration (tax effective)
•
Flexibility to structure your remuneration to best suit your individual needs
The total remuneration you receive does not change. When using salary packaging you are able to receive part of your remuneration in cash and the balance by way of benefits selected from the range of packaging benefit items set out in this guide.
Neither SalaryPlan nor your employer are
Financial Planners or
Taxation Advisors and make no representations as to expertise in providing any financial or taxation information
Reading this guide
This document is to be read as a guide to salary packaging only.
Our best efforts have been made to explain the general subject matter but no warranty is provided regarding the contents of this document nor its accuracy or currency. Any decision to salary package must be made after taking the appropriate financial advice.
What is salary packaging?
Salary packaging is an arrangement between you and your employer where you agree to forgo part of your future entitlement to salary or wages in return for your employer providing you benefits of a similar cost.
•
Salary packaging can offer greater flexibility of your remuneration
•
Salary packaging must be prospective
•
Salary packaging is a voluntary option for eligible employees
•
SalaryPlan and your employer strongly recommend that any person considering salary packaging seek independent financial advice before entering into an arrangement for packaging
Under a salary packaging arrangement:
•
Your employer agrees to provide a nominated benefit
•
If the benefit is subject to Fringe Benefits Tax (FBT) your employer is responsible for paying the FBT
•
The costs of the benefit plus FBT (if any) are deducted from your salary or wage
•
You will then be required to pay income tax (PAYG) on the reduced salary or wages
Eligibility is determined within your employer’s salary packaging policy
Eligibility for salary packaging
Salary packaging is available to all eligible staff who are permanent employees and not subject to a probation period. Packaging is not available to casual staff.
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Benefits available to me
Novated Leases via LeasePlan
Seeking financial advice
Yes. All employees considering salary packaging should seek financial advice.
Commencing salary packaging
•
Consider which benefit(s) you wish to salary package
•
Seek independent taxation or financial advice
•
Complete the “SalaryPlan – Salary packaging employee application form (if this is the first time you have salary packaged with SalaryPlan)
•
Complete the required forms as set out in this guide for the benefit(s) you have chosen
•
If you have any questions or require assistance, contact SalaryPlan
SalaryPlan will not provide financial or taxation advice, where employees have financial or taxation inquiries, SalaryPlan will encourage the employee to seek independent advice from a suitably qualified person
SalaryPlan’s role in salary packaging
Your employer has appointed SalaryPlan to administer employee salary packaging arrangements. In this role SalaryPlan operates as your employer’s agent to facilitate the following tasks:
•
Assist employees with salary packaging inquiries relating to the list of benefits in outlined within this document
•
Provide your employer with deduction required from payroll
•
SalaryPlan will receive funds deducted from payroll into a dedicated account
•
Amounts received will be allocated to individual employee packaging accounts
•
Make payments to each benefit accordance with payment terms
•
Collate FBT liability details and submit to your employer
•
Collate GST transaction and report these to your employer
•
On receiving advice of employee termination, SalaryPlan will promptly reconcile the employee’s individual packaging account and interim FBT liability position
•
Reconcile each employees actual FBT liability
•
SalaryPlan will coordinate collections or refunds via your employer’s payroll
•
Provide employees access to view the status of their individual packaging accounts
SalaryPlan fees
To administer your salary packaging arrangement SalaryPlan charges a fee with each benefit item. These annual GST exclusive fees are shown below:
Per annum fee if paid
Fortnightly
Novated Lease - LeasePlan $54.00
Maximum Fee per year $360.00
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•
The above fees are to cover establishment and administration associated with your salary packaging benefit
•
Your established benefit items can be altered once per year at no charge, however, each change in excess of this will incur an additional fee of $50
Contacting LeasePlan and SalaryPlan
Employees must indicate which company they are employed with when communicating with LeasePlan and SalaryPlan.
Employees need to be aware that the new salary packaging arrangement with
LeasePlan and SalaryPlan will be administered under the customer name and customer (employer) number below:
The University of New South Wales - 1000040154
SalaryPlan – Queries around your deductions from your salary for your benefits.
•
Email: [email protected]
•
Phone queue for employees within Australia: 1300 790 140
•
Fax number within Australia: 1300 790 160
•
Online reporting site:
https://salaryplanreports.leaseplan.com.au
•
Business Hours - Monday to Friday 8:30am to 5pm AEST
LeasePlan Customer Service – Queries around your novated lease.
•
Email: [email protected]
•
Phone queue for employees within Australia: 1300 668 572
•
LeasePlan Online:
https://portal.leaseplan.com.au/irj/portal
•
Business Hours - Monday to Friday 8:30am to 5pm AEST
Further information regarding GST can be accessed from the
Australian Taxation
Office website at
www.ato.gov.au
GST
Your employer is able to claim Input Tax Credits for the GST paid, thus the GST tax credit will reduce the net cost of the salary packaged items to you. Essentially you will only be packaging:
•
The cost of the packaged benefit (e.g. novated lease), excluding the GST element
•
The SalaryPlan salary packaging administration fees, excluding the GST element
•
If you are using the ECM method you will be charged the GST on the contribution
•
Any applicable FBT liability (if any applies)
This cost should not be confused with the
Government imposed taxation surcharge which is payable as part of the vehicle purchase cost and shown separately on your quotation as part of the capital cost of your lease
Luxury tax
A lease is classified as a luxury lease when the amount financed under the lease is greater than the luxury taxation limit (currently $57,466).
Novated leases which have a finance value greater than $57,466 are treated differently for tax purposes.
This treatment imposes additional costs on your employer due to the tax deduction foregone. This cost will form part of your standard payroll deduction for your lease vehicle.
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You the employee have a responsibility to ensure that deductions start on time on your lease and that you query any deductions that you believe to be incorrect
Packaging account deficit collection
If your Salary Packaging account is in deficit, then extra funds must be collected in order to recover costs.
Your account may be in deficit due to:
•
If you do not meet your required kilometres per annum for FBT and incur a further
FBT liability bill (further information on FBT can be found in this guide)
•
There is a deficit in your Operating Costs at Settlement (this is only applicable to vehicles on termination of their lease)
•
Deductions not being sufficient to cover invoices/costs, due to timing of payroll and start of lease commencement or changes to the lease arrangement
SalaryPlan endeavour to ensure that deductions are correct and start as close to delivery of the lease as possible, but if information is not provided in a timely manner by either the employer, employee or the lease provider SalaryPlan may be required to make adjustments to your collections.
These deficits are to be collected as per below:
•
$0 to $1000 within one month
•
$1000 to $2000 within two months
•
$2000 to $3500 within three months
•
$3500+, by negotiation but not to exceed 3 months
SalaryPlan cannot cease deductions until notified by the lease provider that the lease is ceasing or you have terminated employment
Ceasing a lease vehicle
•
If you decide to cease or discontinue your lease you must contact your lease provider to discuss and choose the option you wish to take
•
Once your lease has ceased your lease provider will notify SalaryPlan to cease deductions
•
Upon the cessation of your lease you will be required to complete a Motor Vehicle
Declaration Form
Access our online employee reporting site at:
https://salaryplanreports.l
easeplan.com.au/
Access to salary packaging impact calculator
On-line employee reporting
•
The SalaryPlan reporting site will show all benefits that are active within the current FBT year
•
Each benefit will detail the deductions received from your payroll, and all payments made to the benefit provider
•
Please note that the deductions received are GST exclusive, and the payments made are GST inclusive, you will note a separate section showing the GST credited back to you on all payments made that have GST claimable on them.
•
Any FBT collected will also be shown separate from the deductions used to fund the benefit
•
The detail shown on the reporting site for each benefit will only show the current
FBT year
•
Access to salary packaging impact calculator
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If you require your password to be reset please contact
SalaryPlan
New employee benefit
If you have not yet begun salary packaging please follow the below instructions.
•
Enter your Employers Customer Number
•
Click Log in Button
This will then give you access to the forms required by SalaryPlan and also to the salary packaging impact calculator.
Please follow the instructions on the site from here.
Existing employee benefit
If you have a salary packaging benefit already set up with SalaryPlan or a benefit that has been part of the transition you will be provided by SalaryPlan with your login details at the beginning of the arrangement.
This will then give you access to the forms required by SalaryPlan and also to the salary packaging impact calculator.
SalaryPlan calculator
The SalaryPlan reporting site has a salary packaging impact calculator that you can use to simulate the impact on your take home pay of different benefit arrangements, including your novated lease.
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Motor Vehicle Leasing
What is a novated lease
A novated vehicle lease is an arrangement between you, your employer and
LeasePlan. It enables you to lease a vehicle of your choice, while enjoying the taxeffective benefit of financing the vehicle and its operating cost from pre-tax - or a combination of pre-tax and post-tax - salary.
Permanent employees
(i.e. not contractors or casuals)
Who is eligible for a novated lease
The eligibility for novated leasing is primarily determined by your employer’s salary packaging policy. LeasePlan will not accept applications from employees who are not permanent employees (i.e. not contractors or casuals).
How does novated leasing work
Under this arrangement, you lease a vehicle using a standard lease agreement. A
Novation Agreement is entered into between you, your employer and LeasePlan.
The obligation for the payment of lease rentals is transferred (novated) from you to your employer for the term of the agreement. Therefore, your employer now pays on your behalf the lease rentals and operating costs directly to LeasePlan.
You retain ultimate responsibility to make any payments under the lease in the event that you leave your employer or if your employer fails to make payments on your behalf.
New or used cars are able to be leased
What type of vehicles can be leased
LeasePlan is happy to provide novated leasing on passenger vehicles, new or used, provided the used vehicle meets the criteria set by LeasePlan.
LeasePlan strongly discourages novated leases on commercial vehicles greater than
1 tonne carrying capacity as these vehicles incur a different FBT (not Car FBT) which makes the cost of packaging excessive and not tax effective.
Build equity using pre tax dollars
Concessional tax benefit
The benefits of a novated lease
•
Vehicle costs are deducted from your salary before tax
•
Significant benefits can be obtained via pre-tax savings on lease and operating costs
•
You are able to benefit from the available tax concessions i.e. FBT can be lower than income tax
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Increase disposable income
Potential tax free profit on sale
Great discounts and other fleet management benefits
GST free motoring
Transferable
•
Increase disposable income and lower or eliminate the FBT liability with post-tax contributions via the Employee Contribution Method (ECM)
•
You may achieve a potential income tax-free lump sum benefit at lease expiry
•
You are able to package your current vehicle or a second-hand vehicle, (please refer to your lease provider to discuss the criteria)
•
The vehicle is registered in your name. This negates payment of stamp duty if the vehicle is purchased at lease end
•
You benefit from higher vehicle purchasing discounts through the lease providers buying power
•
You save on operating costs through full fleet management controls
•
Vehicles that have been carefully taken care of will normally have higher resale values as well as lower running costs, these savings are passed on to you
•
You will enjoy GST free motoring. You only pay GST on the residual value at lease expiry
•
The vehicle may also be novated to your new employer or purchased outright if your employment is terminated. (Please refer to your lease providers contract conditions)
You must choose one of these three options within five days of the notice of termination
What happens if your employment is terminated
If employment is terminated, the Novation Agreement immediately expires. You can then choose one of these options:
Option 1 - Continue the lease by paying monthly payments directly to LeasePlan
Option 2 - Terminate the lease early by paying out the lease on the day of departure
Option 3 - Arrange a new Novation Agreement with your new employer (subject to conditions)
Other termination options may apply - refer to your Employee Vehicle Lease
Agreement - Settlement Annexure.
You must choose one of these three options within five days of the notice of termination.
What are the possible risks of novating a vehicle with
LeasePlan?
•
Possible loss on sale at lease end if residual value is not set at correct level
•
Taxation benefits could change under the policy of the Government of the day or via future tax rulings
•
The vehicle may be more expensive to run than was originally estimated
•
The budget allocation calculations may be inadequate if the kilometres travelled are not correctly estimated
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LeasePlan Online
(www.leaseplan.com.au)
Your profile will expire after 90 days of inactivity
Deciding on your vehicle
To help you assess whether a novated lease is right for you and which vehicle best meets your needs, LeasePlan recommends you utilise LeasePlan Online
( www.leaseplan.com.au
).
Your log on details will be provided to you by your employer (normally on your company intranet site or through Human Resources) or you can call LeasePlan on
132 572.
If you are unable to utilise LeasePlan Online call us and we will provide you with the required documents to get you a quote.
•
LeasePlan Online provides you easy online access to:
•
Fast, accurate quotes in real time and 24/7 access
•
Create multiple quotes to compare before deciding on your best option
•
Browse and select additional options to a maximum value of 10% of the total purchase price
•
Request and order on the quote you decide to accept and apply for credit
•
Update your personal profile online
•
View current lease details at anytime
•
News, tips and hints from LeasePlan
•
An Online Help function
When logging in for the first time you will be asked to complete ‘Your Profile’.
Information required to be completed in your profile includes:
•
Your employment details
•
Name and date of birth
•
Drivers licence details
•
Contact information for you
•
Residential address and postal address details
You are not obligated to enter into a Novated lease – your obligation begins only after you have accepted a quote and your credit has been approved. Your profile will expire after 90 days of inactivity.
Residual value and ATO guidelines
The residual value (plus GST) is the amount that remains owing to LeasePlan at the end of the lease term. The residual value is determined at the beginning of the lease and is based on the guidelines issued by the Australian Taxation Office.
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Remember, if talking to a dealer do not sign or commit to the purchase of a vehicle
Note: If you source a quote from a dealer or private party on a second-hand vehicle,
do not sign or commit to the purchase of the vehicle
Sourcing of new vehicles
LeasePlan has a preferred dealer network and LeasePlan Online pricing reflects the discounts we are able to offer through this network. To find out who these dealers are, visit the LeasePlan website (www.leaseplan.com.au) and use the New Vehicle
Supplier Finder located under 'Driver Toolkit' or call LeasePlan.
If you decide to obtain your own pricing from an alternate source, this must be obtained before entering these details into LeasePlan Online. The quote you obtain from the dealer must include the following information:
•
Description of vehicle (including all options and accessories)
•
Dealer on road costs (including stamp duty, registration and CTP)
•
Availability (expected delivery date)
•
Trade-in value allowed (if applicable)
Remember, if talking to a dealer do not sign or commit to the purchase of a vehicle.
Financing second-hand vehicles
You can novate a second-hand vehicle. You will need to source the vehicle yourself and provide LeasePlan with the necessary information on the model and pricing to generate a quote. You can also sell your owned vehicle to LeasePlan and lease it back.
LeasePlan is one of the few lease providers to allow novated leasing of used cars. It must be noted that a processing fee applies. This fee is capitalised into the purchase price of the vehicle and amortised over the term of the lease.
The processing fee covers costs associated with additional processes outside of
LeasePlan’s systems, which support the used vehicle lease. These include:
•
Verifying used vehicle pricing
•
Establishing operating budgets for vehicle
•
Facilitating payment to seller/financier
•
Administering transfer of ownership
LeasePlan will only finance the vehicle at its assessed market value. The vehicle must be no more than four years old at lease commencement, have travelled less than
100,000 kms and will be no older than seven years old with no more than 200,000 km at the end of the lease term.
If you wish to acquire the vehicle via a private purchase, sale and leaseback of your existing vehicle or paying out an existing lease, LeasePlan may require additional information to determine a market valuation (sight unseen) so it must be accurate. The purchase price will be based on market value as assessed by LeasePlan.
note: If you source a quote from a dealer or private party on a second-hand vehicle,
do not sign or commit to the purchase of the vehicle.
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The purchase of the new vehicle and the trade-in must be treated as separate transactions
How are trade-in vehicles handled
When you wish to trade-in your current vehicle against your new vehicle, you must advise LeasePlan of the proposed arrangements. The purchase of the new vehicle and the trade-in must be treated as separate transactions with the proceeds of any surplus on the trade-in paid by the dealer to you, and the sale of the new vehicle being made directly to LeasePlan.
If you have elected to trade your current vehicle against your new vehicle, it is your responsibility to ensure the dealer pays LeasePlan by the due date listed on your Tax
Invoice. Remember it may take three business days for a bank to clear a bank cheque or electronic funds transfer and the exiting lease is not considered paid out until
LeasePlan has cleared funds. If the due date of the invoice has expired you will require a new tax invoice which will include the costs associated with late payment.
It is then possible to apply the proceeds of the trade-in against your new LeasePlan vehicle or make a personal contribution as part of the purchase from the dealer.
However, the maximum that can be contributed against the new vehicle is limited to
20% of the vehicle’s cost.
New vehicle delivery lead times vary greatly with each manufacturer
To obtain a quote on a vehicle
The easiest way to get accurate quotes on a novated lease is to use LeasePlan
Online. LeasePlan’s website includes an online affordability and lease package calculator to help you see what type of vehicle best suits your budget. The comprehensive quote generator found in the secure area of LeasePlan Online then allows you to quote on a range of new vehicle choices, using different variables of vehicle model, lease term, residual value, annual distance travelled and your personal salary details. It is important to forecast as accurately as possible the estimated travel per annum. LeasePlan Online is designed to provide a final, accurate quote that you can then sign and submit to order. If circumstances prevent you from quoting via
LeasePlan Online, call or email LeasePlan.
Please be aware, depending on the vehicle and lease parameters, this formal process can take up to 10 days from quote to order.
New vehicle delivery lead times vary greatly with each manufacturer. LeasePlan generally recommends that you allow up to three months ensuring that special build and specific colour requirements can be met. LeasePlan will advise you of the expected delivery date, however this is subject to change and can be influenced by unforeseen manufacturer or shipping delays. You will be advised of any changes.
LeasePlan quotes are fully disclosed on all items and costs, including interest rate
Information provided in the lease quote
The quote will list the price of the vehicle and a full budget for the running of your vehicle for the term and kilometres indicated. It includes monthly and annual figures for:
•
Lease payment
•
Maintenance and repairs
•
Tyres
•
Registration
•
Roadside Assistance
•
Fuel
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•
Miscellaneous operating cost
•
Replacement Car (if chosen)
•
LeasePlan Comprehensive insurance
•
Management fees
•
Budgeted FBT liability
•
FBT ECM off-set (if ECM is used)
•
GST on ECM post-tax contributions (if ECM is used)
•
Employee package allocation for salary deduction
•
Pre-tax and post-tax lease payment split (if ECM is used)
Lease payment
The lease payment is the cost that LeasePlan as the financier charges to finance your vehicle for the nominated lease term. The various lease attributes relating to your vehicle (amount financed, interest rate, lease residual value, lease term) are used to calculate this lease payment amount.
When booking your vehicle in for work you must advise the service supplier that it is a
LeasePlan-managed vehicle
Maintenance and repairs
All servicing and repair work to your vehicle must be pre-authorised by LeasePlan to ensure application of the best negotiated service and parts prices. Our team of maintenance controllers are qualified mechanics, committed to ensuring that all work carried out on your vehicle is necessary to ensure your safety and that the vehicle is maintained in a sound condition.
When booking your vehicle in for work you must advise the service supplier that it is a
LeasePlan-managed vehicle. The service supplier will use LeasePlan’s web portal or call LeasePlan for pre-work authorisation and all invoices for work are billed to and paid by LeasePlan.
Use a manufacturer-approved dealership for the servicing or repairing of your vehicle.
The service supplier must be an approved repairer of LeasePlan. To find out who these dealers are, please visit the on the LeasePlan website (www.leaseplan.com.au) or call LeasePlan.
We recommend that a franchised dealer specific to your vehicle should complete all mechanical servicing and repairs. This assists in controlling both costs and quality of work. Additionally it saves the necessity of a vehicle being transferred to an authorised dealer to affect any warranty claims that may be applicable as well as avoiding any out-of-warranty issues.
Vehicle maintenance and repair budgets are based upon manufacturers’ specified servicing schedules, as well as any repairs that are the result of normal driving and fair wear and tear (brakes, exhaust, etc).
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Tyres, batteries and windscreen replacement
Details of approved suppliers of tyres, batteries and windscreen replacement can be found in the wallet sized LeasePlan Easy Guide provided with each vehicle at delivery, or via the 'Driver Toolkit' found at www.leaseplan.com.au
Registrations and CTP
Wherever allowed by state bodies your new vehicle will be registered by the dealer under your name, with LeasePlan noted as the fleet manager for renewal purposes. If you receive registration papers from your state body please send these to LeasePlan, a minimum of 20 days before the payment is due, and LeasePlan will pay the registration on your behalf.
Roadside Assistance
This service compliments any membership provided by your vehicle’s manufacturer.
For example, if your vehicle manufacturer offers a two year warranty but your lease is for four years this service starts when the manufacturer warranty expires. The budget set for this service is only for the time the vehicle is not covered under a manufacturer warranty.
It is essential for accurate reporting that correct odometer readings are provided at every fuel fill
Fuel
Fuel will be included in your vehicle budget. You will be provided with a single fuel card that can be used at any Caltex/Woolworths service station. It is essential for
accurate reporting that correct odometer readings are provided at every fuel fill.
Fuel discounts have been negotiated by LeasePlan and your employer, with the discount then passed on to you.
Miscellaneous Operating Cost (previously called Other
Provisions)
There are several items excluded from standard maintenance programs, including broken glass, non-standard maintenance items (i.e. windscreen wipers), minor impact damage and vandalism. A budget called 'Miscellaneous Operating Cost' accommodates these items. Insurance excesses can also be paid through this cost provision with the benefit of becoming pre-tax costs for you.
Replacement car (if chosen)
The replacement vehicle service is provided where vehicles are off the road for more than one day due to major maintenance/repair. Any costs for providing a replacement vehicle will be included as part of the reconciliation against budgeted costs.
Please note: If you elect to remove the replacement vehicle budget from your salary sacrifice package, you will have to make alternative arrangements and pay for any replacement vehicle independent of LeasePlan.
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Terms and conditions is available at
www.leaseplan.com.au
Comprehensive insurance
LeasePlan offers competitive premiums for total cover insurance. The premium is budgeted for in the lease payment and is paid as part of your packaging benefit.
These premiums are subject to annual review and an individual’s claims history.
Information on LeasePlan’s insurance policy, its terms and conditions is available at
www.leaseplan.com.au
If you elect to insure the vehicle with a different supplier you are required to do so outside of the novation agreement. Additionally you must also supply LeasePlan with a certificate of currency every year.
Please note: If you fail to provide accurate odometer reading at each fuel fill our ability to provide this FBT tracking service will be limited and could provide incorrect kilometre target calculations
Regular reporting
You will receive a monthly Motor Vehicle Report (MVR) comparing actual and budgeted costs for the reporting period, as well as the cumulative actual versus budgeted costs.
Accurate odometer readings at fuel fills will verify kilometres travelled against initial estimates. It will also highlight your target odometer reading at completion of the current FBT year and track your progress. A warning is provided if you are in danger of falling into a more costly FBT bracket, including an estimation of excess FBT liability.
FBT tracking services (for leases started prior to 11 May
2011)
Vehicle kilometre information is contained in the monthly vehicle report to assist with monitoring your vehicle lease.
Each monthly report shows the remaining average monthly kilometres required to be travelled to reach your target set for the FBT year. It will also indicate an anticipated
FBT liability where your mileage is below the budgeted FBT bracket.
Please note: If you fail to provide accurate odometer reading at each fuel fill our ability to provide this FBT tracking service will be limited and could provide incorrect kilometre target calculations.
Variations to operating costs
Quotes on novated leases are provides with a budget set for the chosen operating costs included in your leases. These budgets are based on annual distance travelled and the type of vehicle you are leasing.
Often there will be unused budget amounts at the end of the first year. This is because operating costs are generally lower in the initial part of a lease when vehicles have lower servicing requirements, creating a budget surplus for the first few months of the lease. Further into the lease the unused budget will diminish as tyre replacement and major service intervals occur. A final reconciliation will be performed at the completion of your lease. If your vehicle costs less to operate than the budgeted amount then any surplus will be returned to you via your employer’s payroll at the end of your lease.
This is because of the prevailing Income Taxation laws. Conversely, if final costs are greater than anticipated these costs will be billed to you via your employer’s payroll. A nominal ’estimated shortfall amount’ is included in the settlement process.
If a major cost deficit or surplus occurs during your lease, LeasePlan can recalculate your lease to modify the variance. Your approval is sought, however is not required.
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Incorrect estimate of travel
LeasePlan regularly reviews budgeted versus actual costs and kilometres travelled. If abnormal (> 15%) debits or credits are being generated or significant kilometre variations arise, we will contact you to agree on a new budget and therefore a new package allocation.
Please note you must attach the original tax invoice/receipts with the cash claim form
Claiming out of pocket expense reimbursement
Cash Claim forms may only be used to claim reimbursement of costs incurred in emergency situations, for instance, where the allocated fuel cards could not be used, or for minor mechanical repairs of an urgent nature only (not for normal schedule servicing). Cash claim forms are available at www.leaseplan.com.au
Please note you must attach the original tax invoice/receipts with the cash claim form.
Approximately 12 weeks prior to the expiry of your contracted lease term you will be asked to exercise one of the following options before lease end
Expiry of the contracted lease term
Approximately 12 weeks prior to the expiry of your contracted lease term you will be asked to exercise one of the following options before lease end:
Option 1 - Purchase the vehicle at the residual value plus GST
Option 2 - If our your employer allows, extend your lease for a further term (minimum extension term of 12 months and conditions apply)
Option 3 - Return the vehicle to LeasePlan (any profit / loss on sale will be to your account)
Refer to the Employee Vehicle Lease Agreement, Standard Terms Clause Section 7 for details on each of these options, located at
http://www.leaseplan.com.au/driver/forms
The current administration fee that is applied is $300 per additional term
Failure to advise end of lease option fee
If you fail to advise your end of lease option within 28 days of the scheduled end date of the lease or fail to complete your obligation for your selected option, LeasePlan must undertake actions within its systems to allow the lease to continue or be extended for an additional lease term. If this occurs an administration fee will be applied to your lease for each additional term that is actioned by LeasePlan as a result of your failure to advise or complete obligations. The current administration fee that is applied is $300 per additional term.
Corporate CarPlan involuntary redundancy (Contract 58)
As an employee of theUniversity of New South Wales you have the choice of the standard novated lease product as mentioned previously in this guide and choice of the involuntary redundancy contract. Information relating to the terms and conditions of this contract are detailed below.
What is the Corporate CarPlan Involuntary Redundancy facility
LeasePlan’s Involuntary Redundancy (Contract 58) novated lease includes a feature that covers you if your have been made redundant on an involuntary basis. If you are made redundant involuntarily LeasePlan will release you from paying rental for your
16 | P a g e
lease for a period of three months (three month rent free period). If you are still unemployed at the completion of the three month rent free period you may then choose from the following:
•
Payout your lease
•
Continue your lease without a novation arrangement in place
•
Return the vehicle to LeasePlan and walk away
•
How does it work
If you become employed within the three month rent free period, you will be required to enter into a new novation arrangement with your new employer. To qualify for the three month rent free period and for the option to hand back the vehicle to LeasePlan the following must occur:
•
The Advice of Employee Termination supplied by your employer must stipulate the termination was an involuntary redundancy
•
Within five days of your employment termination, you must supply to LeasePlan evidence from Centrelink (or equivalent government agency) of your unemployed status
•
At various points during the three month rent free period and upon return of the vehicle you will be required to provide evidence of your continued unemployed status
If you choose to return the vehicle, you must book an appointment with LeasePlan where we will carry out an inspection before you hand it over to us.
Following this inspection, LeasePlan will require that you meet any cost of damage, any pro-rata kilometres travelled in excess of budget, or any deficit that may occur in the ‘Miscellaneous Operating Costs’ and ‘Replacement Car’ expenditure accounts.
LeasePlan will also require you to pay the balance of the Involuntary Redundancy Fee for the months remaining in the lease, together with any rental payments until the vehicle is returned to LeasePlan. By exercising the hand-back option, no further settlement of any resale or operating cost variances occurs.
Costs
For this involuntary redundancy feature a fee of $650 (irrespective of the term of the lease) is applied, amortised over the lease term and included in the lease payments.
Approximate pre-income tax costs including lease interest per month are:
Lease term Per month Per annum
24 months
36 months
$27.00
$18.00
$325.00
$217.00
48 months $14.00 $163.00
At the completion of your initial lease term you may decide to re-lease your vehicle for a further lease term. In this situation an additional premium of $650 will be applied, amortised over the new lease term and included in the lease payments.
Availability
The optional Involuntary Redundancy feature is only available where LeasePlan is the financier of your lease agreement. It must be your nominated requirement at the commencement of the lease. The lease feature may not be available to people who
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have not completed their probationary period or have not had 12 months continuous employment prior to their application.
How FBT affects your package costs
When you obtain a vehicle under a novation lease arrangement your employer becomes liable for Car Fringe Benefit Tax. The FBT liability, which your employer incurs, is charged back to you as part of your salary deduction. Car FBT is usually calculated using a statutory formula.
Protected rates if your lease started before 11
May 2011
If you lease goes through a term extension or refinance of term then the new
FBT transitional rates will apply from the 1st of April of the following year
Transitional rates if your lease started after the
11 May 2011
New FBT statutory percentage rates post budget 2011
In the 2011 Federal Budget, changes to the Fringe Benefits Tax Assessment on leased vehicles was announced. This change related to any lease with a contract entered into from and including the 11/05/2011.
If you entered into your lease contract prior to the 11/05/2011 the below rates
(protected rates) will apply for the life of the lease or until your lease is re-financed, extended for an additional lease term or change of employment occurs.
Distance travelled During FBT
Year
0 – 14999 Km
15000 – 24999 km
25000 – 40000 km
Statutory Rate applicable
26%
20%
11%
Greater than 40000 km 7%
If your lease goes through a term extension or refinance of term then the new FBT transitional rates will apply from the 1st of April of the following year.
If you entered into your lease contract on or after the 11/05/2011 the below rates
(transitional rates) will apply on an increasing scale as set out in the table until the flat rate of 20% is achieved.
Distance travelled During
FBT Year
0 – 14999 Km
New Contracts entered into from 11/05/2011 inclusive
From 10
May 2011
20%
From 1
April 2012
20%
From 1
April 2013
20%
From 1 April
2014
20%
15000 – 24999 km
25000 – 40000 km
Greater than 40000 km
20%
14%
10%
20%
17%
13%
20%
20%
17%
20%
20%
20%
Effects of distance travelled on FBT (protected rates only)
Estimated Car FBT liability is calculated based on your estimated annual kilometres per year at the time a quotation is prepared. FBT liability in reality is paid on the
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actual kilometres travelled between 1 April and 31 March. If you do not meet your required kilometres per annum for FBT you may incur a further FBT liability bill.
There are strict conditions around days unavailable, and you must provide a written declaration in regards to these at the end of each FBT year
Please contact Estely
Pruze (Manager of
Fleet at the University of NSW) to ensure you comply with the policy of the University.
Days unavailable
If your novated lease vehicle is not available for private use during the FBT year days unavailable could be applicable to your FBT declaration.
Days unavailable can reduce the amount of FBT payable for the year, as you are not charged/liable for FBT on these days.
It is important to note that days unavailable do not reduce the kms you are required to travel (protected rates only) to make your budgeted FBT bracket you have nominated.
There are strict conditions around days unavailable and you must provide written declarations in regards to these at the end of each FBT year, and you or your employer may be requested to provide further proof that the days unavailable are valid.
The conditions for days unavailable are detailed below:
•
A day unavailable is a whole twenty four (24) hour period and does not include the day the vehicle is dropped off or the day the vehicle is picked up
•
The vehicle must be garaged at the employer’s place of business. Please contact
Estely Pruze (Manager of Fleet at the University of NSW) to ensure you comply with the policy of the University.
•
Keys must be left with the employer – the employer must control all access to the vehicle. Please contact Estely Pruze (Manager of Fleet at the University of NSW) to ensure you comply with the policy of the University.
•
Smash repair and maintenance that meets the whole 24 hour period are claimable as the vehicle is deemed un-roadworthy and cannot be driven
•
Vehicle must not be available for private use
•
A declaration must be supplied at the end of the FBT year
A declaration is always required if you are on protected rates
If you have days unavailable and/or out of pocket contributions you must submit a declaration
FBT declarations your obligations
At the end of the FBT year (31st of March) you are required to submit a declaration to either your lease provider or SalaryPlan.
This is used to calculate your actual FBT liability for that year.
The declaration includes
•
The end odometer reading as at the 31st March – compulsory if your lease is on
protected rates
•
Any valid days unavailable
•
Any out of pocket contributions made to the running costs of the leased vehicle
The odometer reading that you provide is verified against maintenance and fuel fill readings that have been submitted on filling your vehicle.
If your declared reading is deemed to be invalid and not fitting with your actual usage you will be requested to have your vehicle and odometer reading sited and verified by your employer.
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These declarations are also used to assist in managing your operating budgets on your lease e.g. fuel, tyres, and maintenance, therefore it is important that these are accurate.
The employee contribution method (ECM)
For more information on
Novated Leasing please refer to the link below.
http://www.leaseplan.com.au/
The Employee Contribution Method (ECM) can help improve the tax effectiveness of your motor vehicle packaging arrangement. SalaryPlan encourages all employees to consider this method.
ECM is where you make a post-tax contribution towards the cost of operating your novated lease vehicle.
Instead of salary sacrificing the complete vehicle lease cost including Car FBT liability from pre-tax salary, a portion of the vehicle lease cost is deducted as an 'employee contribution' from your post-tax salary. This will show on your pay slip as a second salary deduction post-tax.
If you elect to use ECM, SalaryPlan will calculate the post-tax contribution needed to eliminate your estimated Car FBT liability. By reducing or eliminating the Car FBT amount payable you lower the overall packaging cost and increase your disposable income.
Please note for protected FBT rates:
•
If you do travel into a higher km bracket for the FBT year there is no surplus fringe benefit tax to be refunded
It is important that you budget correctly and monitor your km targets during the FBT year.
•
By exceeding your nominated FBT km bracket you may reduce the tax effectiveness of the package
•
If you do not meet your nominated kms for the FBT year, you will not have contributed sufficient ECM to offset the actual FBT liability and this will result in further funds being required to be collected from your pay
•
It is important that you budget correctly and monitor your km target during the FBT year
Creating a quote with LeasePlan
When you are accessing LeasePlan online for the first time you will need to register as a new user please use the appropriate customer number below:
To generate a quote yourself visit LeasePlan
Online via the
LeasePlan website www.leaseplan.com.au
The University of New South Wales - 1000040154
Please also enter your correct payroll/employee ID as shown on your payslip into the
LeasePlan Online system as this ensures you are identified by SalaryPlan and your employer correctly.
Click on the link below for more information about leasing and vehicle selection with
LeasePlan:
https://portal.leaseplan.com.au/irj/portal/anonymous
If you have any queries, please contact the
Customer Service Centre on 1300 739 572 or email [email protected]
Using LeasePlan online you can:
•
Create a quote
•
Save and compare new vehicle quotes
•
Approve a quote and submit an order online, including your credit application
•
View your existing lease
•
Update your own profile details
20 | P a g e
•
View your motor vehicle reports
The Driver Help section can assist you with each step along the way, and our driver specific news will keep you up to date with industry news and views.
You can also make use of the SalaryPlan reporting site salary packaging impact calculator (mentioned in this guide) if you are packaging more than one benefit to assess your take home pay position.
Please remember if you wish to utilise ECM you must nominate this at the time you complete a lease quotation
Commencing salary packaging for a novated lease
•
Before you apply for a lease you should obtain advice from your financial advisor
•
Apply for your lease and complete all required documentation as requested by the novated lease provider
•
Once your vehicle is ordered, SalaryPlan will be notified by the lease provider and will issue any required documents for you to complete
To enable this reconciliation to occur in a timely manner and to be accurate, you are required to complete the Motor Vehicle
Declaration Form and return this to SalaryPlan as soon as possible after the lease ends
End of lease
Once the lease provider has advised SalaryPlan that your lease has ended,
SalaryPlan will undertake a full package reconciliation for that vehicle benefit.
The reconciliation takes into account the following items:
•
Deductions collected from your payroll by SalaryPlan
•
Lease payments paid to the lease provider
•
Operating cost reconciliation provided to SalaryPlan by the lease provider
•
Actual FBT liability as at the end date of the lease
•
Any balances pre-SalaryPlan transferred from your employer
•
Please note that all salary packaging costs are excluding GST
You will then be provided with a full package reconciliation, this will show either an overall surplus or deficit position of your package.
If there is a surplus this will be returned to your payroll to be credited to you.
If there is a deficit this will be collected from your pre-tax salary as per the deficit collection scheduled outlined in this guide.
To ensure no penalties you should also contact the lease provider as soon as possible
Leaving employment
•
Your employer will notify SalaryPlan that you are ceasing employment
•
Your lease provider should contact you to discuss your options
•
Prior to your last day of employment SalaryPlan will provide you and your employer with an estimate reconciliation, this is used to assess if any funds are required to be held back from your termination pay
•
To enable this reconciliation to occur in a timely manner and to be accurate, you are required to complete the Motor Vehicle Declaration Form and return this to
SalaryPlan as soon as possible after the lease ends
•
Once the lease provider has advised SalaryPlan that your lease has ended,
SalaryPlan will undertake a final package reconciliation for that vehicle
•
This will show either an overall surplus or deficit position of your package.
•
If there is a surplus this will be returned to your payroll to be credited to you
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The reconciliation cannot be made final until notification from the lease provider advises that you have ceased or transferred the lease, and where relevant operating cost reconciliation is received by SalaryPlan
•
If there is a deficit you will be required to pay this to SalaryPlan within seven days of receiving the final reconciliation
This reconciliation takes into account the following items:
•
Deductions collected from your payroll by SalaryPlan
•
Lease payments paid to the lease provider
•
Operating cost reconciliation estimate provided by the lease provider
•
FBT liability as at the end date of the lease
•
Any balances pre-SalaryPlan transferred from your employer
•
Any funds collected from final pay based on the estimate reconciliation
•
Please note that all salary packaging costs are excluding GST
If at any time you have any questions about information in this guide please contact SalaryPlan.
22 | P a g e
Return Fax:
Return Email:
1300 790 160 [email protected]
SalaryPlan – Welcome letter
Welcome
LeasePlan welcomes you to your employers flexible salary packaging program.
To participate in this program you need to verify with your employer that you are eligible.
Before you submit any forms to participate in a salary packaging benefit you should:
1. Read and understand your employer’s salary packaging policy and all associated obligations under that policy
2. Read all material including ‘User Guides’, which are made available to you via your employer’s intranet and/or
LeasePlan website.
3. Ensure you are fully informed on the topic of salary packaging and received independent professional taxation or financial advice.
If you wish to proceed with establishing a salary packaging benefit you will be required to complete, sign and submit an ‘Employee Benefit Authority’ form together with the relevant form(s) for the specific benefit item(s) you wish to package.
While LeasePlan will be responsible for facilitating and administering your packaging arrangement, LeasePlan nor its staff are qualified to give financial, investment, taxation, superannuation, insurance or legal advice.
Overview
Each benefit that you may choose to include in your salary packaging program is legislated in the Fringe Benefits
Tax Assessment Act 1986 (FBTAA). The FBTAA sets the criteria and substantiation requirements for all fringe benefits. Each benefit that you may select has specific declarations and substantiation requirements.
For this reason some forms will need to be completed immediately to begin your nominated packaging benefit and other forms may need to be completed at certain times during the year depending on the specific benefits you have selected.
It is important that you complete the necessary forms when required. If you fail to do so, you may forfeit certain tax exemptions or be required to pay Fringe Benefits Tax (FBT) at the highest rate. You should keep this in mind and ensure all forms are completed truthfully and accurately and submitted to LeasePlan or your employer in a timely manner.
Payments, whether they are to a benefit provider or a reimbursement to you, can only be made when adequate funds have been deducted from your salary and remitted by your employer into our nominated funds account.
Where there are insufficient funds in your packaging account these benefits may not be paid.
Instructions
Please ensure you read and follow the instructions included in each salary packaging benefit form.
When your forms are completed and signed please send them to LeasePlan via:
1. Fax to the number detailed at the top of each form, or
2. Scan the form and email it to the email address detailed at the top of each form
To ensure that LeasePlan has understood your salary packaging choice, we will forward a confirmation of the packaging arrangement to your nominated email address.
We request you review this report for accuracy and, if need be, complete any changes and immediately return the document to LeasePlan.
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Return Fax:
Return Email:
1300 790 160 [email protected]
SalaryPlan – Salary packaging employee application
Instructions
All employees participating in Salary Packaging must complete, sign and submit this form to commence their participation.
Refer to your ‘User Guide’ to determine other required forms for each type of employee benefit.
Employee Details
Title: First Name: Surname:
Employer Name: Employee’s Payroll No.:
Employee’s Mobile No.: Employee Phone No.: ( )
Residential Address:
Email Address:
Payroll Frequency: Monthly Fortnightly
Employee Authorisation, Acknowledgements and Commitments
Postcode:
Date of Birth: / /
I, being an eligible employee of the employer listed above, apply to participate in this salary packaging program.
Upon signing this form, I formally acknowledge and agree to the following:
1. That I have read the Salary Packaging User Guide and understand my employer’s salary packaging policy.
2. That I have sought independent financial advice or have waived the need for such advice.
3. That I will be fully responsible for all the costs associated with salary packaging these benefits including any
Fringe Benefits Tax liability, ATO fees, charges, interest or penalties that are now or may in the future be applicable to the salary packaging benefit.
4. That I will be fully responsible for all LeasePlan fees, which are now or in the future, applicable to the salary packaging benefit I have selected.
5. That I will fully compensate my employer and LeasePlan for all loss, damage, costs or expenses suffered or incurred as a result of the salary packaging benefits I have selected
6. That I will upon demand repay any amounts due to LeasePlan as a consequence of LeasePlan administering my packaging benefits.
7. That I grant my employer and LeasePlan the authority to make all appropriate deductions or adjustments to my salary in order to facilitate my nominated salary packaging benefit.
8. That I am fully aware that LeasePlan must hold sufficient funds in my salary packaging account to enable my nominated benefit to be paid and that LeasePlan has no obligation to pay my packaging supplier where insufficient funds are available.
9. That any bonus granted to me may be paid into my salary packaging account with LeasePlan and used for salary packaging benefits.
I also understand and acknowledge that LeasePlan nor its staff are not qualified to give financial, investment, taxation, superannuation, insurance or legal advice and that I shall seek independent advice on these matters.
Approval
Employee:
Authorised
Employer:
Print Name
Print Name
SIGNATURE
Signature
SIGNATURE
Signature
/ /20
Date
/ /20
Date
Page 24 of 28
Return Fax:
Return Email:
1300 790 160 [email protected]
SalaryPlan – Novated lease benefit form
Instructions
This form must be completed and signed to commence your LeasePlan novated leasing benefit. Payroll deductions for this benefit will be aligned to your lease commencement date and will allow for funds to be collected and paid in accordance with your lease payment due dates.
At the end of each Fringe Benefit Tax (FBT) year (31 March) you will be required to provide your final odometer reading and other details to enable accurate FBT calculations.
If you do not supply these details the FBT liability may be calculated at the highest FBT rate.
Employee Details
Title: First Name:
Employer Name:
Employee Certification and Authorisation
Surname:
Employee’s Payroll No.:
I acknowledge that the FBT calculated with my vehicle benefit is based on my expected annual kilometres travelled, and needs to be supported by my odometer reading as at 31 March each year the vehicle is part of my packaging benefit, as well as lease end or when the benefit ceases.
I also acknowledge if my actual kilometres travelled does not achieve the required threshold I may be required to pay additional fringe benefits tax as part of my packaging benefit.
I also agree that LeasePlan’s administration fees can be deducted from my payroll with this benefit and remitted to
LeasePlan.
Vehicle Benefit Details
LeasePlan Quote Number: Lease Term No Months:
Note: FBT liability will be calculated using the statutory formula method unless a valid log book has been kept for at least 12 consecutive weeks.
If you do not meet your required kilometres per annum for FBT, you may incur further FBT liability.
This is to be collected through subsequent pay cycles as per below:
•
•
•
•
$0 to $1000 within one month
$1000 to $2000 within two months
$2000 to $3500 within three months
$3500+, by negotiation but not to exceed 3 months
Approval
Employee:
Print Name
SIGNATURE
Signature
/ /20
Date
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Return Fax:
Return Email:
1300 790 160 [email protected]
SalaryPlan - Motor Vehicle Declaration
Instructions
Please read the attached explanation and complete the following Declaration in full, then return this page only to the above fax number or email.
This form needs to be accurately completed and returned by the end of FBT year (31 March) or the advised date of employment termination in order for your FBT liability to be accurately calculated.
Please ensure you to retain the original copy of this form and any other relevant documents for taxation audit purposes.
Employee Details
Title: First Name: Surname:
Employer Name: Employee’s Payroll No.:
Vehicle Rego No.:
Final Odometer Reading
Odometer Reading:
Contact Phone No.:
As at Date: / /20
Days Not Available (Refer to Guidelines – Non Availability of Company Vehicle)
Date From Date To Description of Non Availability
/ /20 / /20
No. of Days
/ /20
/ /20
/ /20
/ /20
/ /20 / /20
Employee Contributions (Refer to Guidelines – Employee Contributions)
Date Paid Description
/ /20
/ /20
/ /20
/ /20
Operating Cost Method (Refer to Guidelines – Operating Cost Method)
Percentage of Business Use:
Approval
I declare that the details entered above are correct.
Employee:
Print Name
SIGNATURE
Signature
Amount (GST Incl.)
/ /20
Date
Page 26 of 28
Employee FBT Declaration Guidelines
Non-availability of Company Vehicle (Days Unavailable)
One of the factors in determining the extent of FBT liability is the number of days that the vehicle is made available for your use. Any days in the FBT year that the vehicle is not made available to you will reduce the FBT liability associated with the vehicle, examples as follows:
• The vehicle is garaged at your employer’s premises whilst you are on holidays or away on business, the keys are held by your employer and the vehicle is not available for private use by any other staff or associate
• The vehicle is at a crash repairer after an accident. Unavailability commences from the first whole day that the vehicle was not available for use following the accident and ceases the day prior to collection
• A service or repair of the vehicle (including accident repairs) requires it to be held for more than a 24 hour period by the service provider or repairer and excludes both the day of drop off and collection
As a general rule, unavailability occurs when you or any associate (either your family or other staff) do not have use of the vehicle and the keys to the vehicle are in the control of your employer. In all cases unavailability commences from the first whole day that the vehicle was not available for use (midnight to midnight).
Days unavailable can only be claimed during the period in which the vehicle is held – in the case of a leased vehicle during the term of the lease.
If the vehicle was sold during the year only include the period up to that date in your calculations.
If your vehicle has met any of the criteria highlighted above you should include this information in the attached ‘Motor
Vehicle Declaration’ form.
Employee Contributions
An employee contribution using ‘after-tax’ dollars can reduce the taxable value and thus your FBT liability. Your personal contribution may be an amount paid directly by you (including GST) to your employer, for the use of the car or an amount paid by you (again in ‘after-tax’ dollars) for some of the car’s operating costs (e.g. fuel). Your payments must be a vehicle related operating expense (i.e. they must directly relate to the expense of running or upkeep of the vehicle).
This does not include parking or road tolls or capital cost items added to the vehicle (e.g. towbar, mud flaps, sunroof, body kit etc). Please note that any costs reimbursed by your fleet manager or employer cannot be claimed as employee contributions.
To make a personal contribution you must supply documentary evidence of the expenditure (e.g. receipts or tax invoices) to your employer. However, in the case of petrol and oil costs a declaration by you will be sufficient for this purpose. Personal expenses along with required documentation should be listed on the ‘Motor Vehicle Declaration’ form. Please do not send your receipts/invoices to LeasePlan.
Please ensure you retain any receipts/invoices as they may be required for verification of tax compliance.
Operating Cost Method
To use the operating cost method to calculate the taxable value of a car fringe benefit, the percentage of business use for that vehicle needs to be calculated, and records (logbook) that substantiate the percentage must be kept.
The percentage is worked out using the following formula
A/B x 100 = Percentage of Business Use
A = Your estimate of Business Kms travelled in the FBT year (or part year, as the case may be).
B = The total kilometres (both business and private) actually travelled by the car during the same period.
In estimating the Business Kms travelled per year you must:
• Keep detailed logbooks recording all business journeys undertaken in the car for a continuous period of at least
12 weeks (Your logbook entry must show details as required by the ATO. Please refer to www.ato.gov.au)
• Keep odometer records of the total kilometres travelled during that period.
• Keep odometer readings of the total kilometres travelled during the year.
• Estimate the number of business kilometres travelled during the full FBT year (or part year if appropriate), and
• Take into account all relevant matters, including logbook, odometer and any other records you keep, and any variations in the pattern of business use throughout the year due to things like holidays or seasonal factors.
For more information please refer to the ATO website (www.ato.gov.au).
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