Jun 4 2014
End of Transitional Arrangements
Customer’s salary packaging an Associate or Novated Lease will be familiar with the ATO requirement to achieve the relevant kilometres for their nominated statutory bracket each FBT year. This final odometer reading is then used to accurately calculate any Fringe Benefits Tax that has been incurred on your Associate or Novated lease.
As a result of the recommendations outlined in the Henry Tax Review, the formula for valuing car fringe benefits was replaced with a single statutory rate of 20 per cent, regardless of the kilometres travelled. This was done via transitional arrangements for all new Novated Lease and Associate Leases that were entered into after the 10th May 2011.
As the transitional arrangements have now concluded, these customers will no longer need to manage their driving behaviour to achieve kms as the 20% flat rule will now apply.
Importantly, any Salary Packaging of pre-existing Novated Lease or Associate Lease prior to the changes effected on the 10th May, 2011 will still be required to achieve their nominated kilometres.