Nov 9 2018
A novated lease can save you more with a holiday
It’s time for a break, you deserve it – and you’ll make savings.
How can I save on my novated lease when I go on holiday?
Sometimes you need to spend money to save money. If you keep your car parked at your work, when you return from a holiday you can submit car unavailability on your novated lease which reduces your FBT and ultimately saves you more.
What is car unavailability?
When you take a holiday, if you meet the conditions below, you can claim car unavailability on your novated lease. Car unavailability refers to the number of days your car is not available to for use.
You can submit an unavailability claim at the end of the days your car is not in use under the following conditions:
- The vehicle is garaged on company owned or leased premises; AND
- The employer removes the control of the vehicle from the employee (e.g. holds the keys) and ensures the vehicle is not available for private use by the employee or a family member of the employee
- The vehicle is being repaired and you do not have access for at least a 24 hour period
Sam has a novated lease vehicle purchased for $26,000. The FBT applicable to the lease is $5,200 per year. Remunerator uses the employee contribution method (ECM) to setup the novated lease. This includes pre and post-tax deductions when designing the salary packages to ensure Sam doesn’t actually pay FBT.
Based on the above, the FBT would accrue at a rate of $100/week =>$14.29 per day.
Sam has to go to the Gold Coast for work for 2 weeks.
Sam leaves the car in the company car park at the office and leaves the keys with the HR Manager during the holiday. The vehicle is kept there for the duration of the trip and no one has access to it.
Upon returning Sam can submit an unavailability claim for the 14 days away.
Sam saves $14.29 x 14 = $200 in the cost of the novated lease car which will be reflected in the reconciliation at the end of the year!
How much can you save?