Remunerator News

Aug 12 2013

Labor wants FBT when you change Jobs

There is a little nasty clause in the changes to FBT on cars proposed by the Labor Government is that anyone who currently has a Novated Lease is under the existing FBT rules for cars EXCEPT for when there is a “material change” to your lease arrangement.

This means you are ok UNLESS:

(1) you change jobs;

(2) for Government Employees, this could mean transferring from one Department to another;

(3) a restructure of your Employer which means that you are employed by a different employing entity (if you have been working for the same “Employer”, have you been continually employed by the same legal entity all your working life?);

(4) if your Employer merges, de-merges, or restructures for reasons beyond operational reasons which may include Tax Structures or Registered Location; or

(4) at the end of the lease you will no longer have a choice but to pay out the lease (you can no longer “roll it over” and continue to pay it off through your salary package and receive the savings).

So at a minimum this proposed change, put forward by the Labor Government, will limit your options at the end of the lease and cost you more than what it could have cost you and, at worse, puts restrictions on employment flexibility during the lease term or at risk should your Employer undergo a restructure.

The challenge for Remunerator is that itsintention is to not run a political campaign, it has been endeavouring to run a campaign to raise awareness of the impact that the proposed change to FBT has on our Customers and the Motor Vehicle Industry as a whole. Our position is clear, we are against the tax being implemented REGARDLESS of what Political Party is elected.