[ArWeTherYet]

So old Rudd is back and making decisions on the fly, changing the salary sacrificing on cars.......among other things.

Does anyone know what the changes will mean.......or are they still making it up as they go. My wife salary sacrifices and must be in the minority that earns under 80k and has a Camry. She runs around looking after a dozen local region services for a large multinational corporation......the Micks.

Interestingly they haven't targeted tradies as well.

 

[Ado]

My understanding is this.

If the use of your car is more than 80% for work then there is no change.
If you have an existing contract then there is no change.

If you use your car for 20% or more private km, and are starting a new contract, you will pay more FBT because (put simply) you weren't previously paying the accurate amount.

Regardless of how many km you do, you will need to keep a log book (or log app on your phone) to show the split.

 

[ArWeTherYet]

Do you know how it will work once it does/if comes into affect. Will it be based on a period of time, like 3 months of log books/apps or continual? How much extra work will it be for the employer? Will it mean we'll go back to the old way of using your own private car and getting reimbursed according to work mileage?......or they dont know yet.

Its not the paying your dues part that is of concern its the total lack of information on it implications that is the problem.......funny I was starting to warm towards Rudd, but then I'm reminded what he was like before, nothing has changed.

 

[koich]

He can't do anything without recalling parlimennt.

 

[Ado]

Will it be based on a period of time, like 3 months of log books/apps

My understanding is this, based on what was said on the radio.

Will it mean we'll go back to the old way of using your own private car and getting reimbursed according to work mileage?

This is what I do anyway. I'm self employed and don't want to go anywhere near FBT, and never have. I just claim and pay myself 72c/km (tax free) whenever I use my car for work purposes. Simple.

 

[GaryD]

The vast majority of the people taking advantage of the current scheme are using it for big ticket- non-made in Australia autos.

Whatever your feelings about the auto industry's viability here - this tax break was always favouring rich people, who don't need the break.

It was corporate welfare for Audi and Mercedes. Glad to see it go. Tradies should actually benefit.

That's actually a long way from the truth. My missus works in a salary packaging company and the vast majority of them are people earning under 100k and for normal family cars. Local manufactured cars are only one side of the jobs at risk due to this decision. Financiers, insurers, car yards, mechanics, etc etc all get effected in some way. Of course when they have less disposable income they spend less for their goods and services and so the cycle continues.

Abbott has stated he will oppose this, however no new Novated lesases are being processed until parliament can vote on it.

 

[GaryD]

The point you were making was that the majority were leasing exotic and luxury taxes. That's just not possible unless you earn well over 100k or you are single and have no dependants.

Of course I have a vested interest I clearly pointed that out.

The whole thing reeks of a poorly thought through decision, without any real idea of how this would effect the economy as a whole.

The hard done by tradies may find it a whole lot harder if unemployment starts to jump. No money coming in equals no new houses, renovations, extensions etc.