VFACTS July 2013

[jpd80]

Originally Posted by KIWI-1

Didn't Ford Credit exit Australia at the time of the GFC?

September 2009 for retail customers but not long after that for dealer floor plan financing.

[csv8]

Originally Posted by KIWI-1

Didn't Ford Credit exit Australia at the time of the GFC?

Ford Credit transferred loans to
Macquarie Group Australia

[2011G6E]

Originally Posted by mr smith

Yup, should be killed off. How dare someone work hard and be rewarded.

Yes, too often we heard the terms "rich fat cats with Mercedes Benzes or BMW's" used on the radio and TV to explain the reasoning behind it.

Then the awkward fact came out that 70% of the people taking advantage of salary sacrifice lease cars made less than $100,000 a year. "Fat cats" and corporate high fliers don't usually go and lease a car anyway, and the cars they lease would be completely different to what any normal person does.

Why the big hatred of people...ordinary workers...trying to do any little thing to minimise their already high tax burdens? Why are ordinary workers always penalised and made to feel like "cheats" if they can scrape any little access to some scheme that legally allows them to have a small advantage?


Can't have those uppity prols getting a little money ahead of them...wage slaves and people who rely heart and soul on their place of employment to feed their kids make much more tractable work units...

[olds]

Originally Posted by 2011G6E

Yes, too often we heard the terms "rich fat cats with Mercedes Benzes or BMW's" used on the radio and TV to explain the reasoning behind it.

Then the awkward fact came out that 70% of the people taking advantage of salary sacrifice lease cars made less than $100,000 a year. "Fat cats" and corporate high fliers don't usually go and lease a car anyway, and the cars they lease would be completely different to what any normal person does.

Why the big hatred of people...ordinary workers...trying to do any little thing to minimise their already high tax burdens? Why are ordinary workers always penalised and made to feel like "cheats" if they can scrape any little access to some scheme that legally allows them to have a small advantage?


Can't have those uppity prols getting a little money ahead of them...wage slaves and people who rely heart and soul on their place of employment to feed their kids make much more tractable work units...

Because " honest taxpayers " are paying for the rort

[Fordman1]

Originally Posted by olds

Because " honest taxpayers " are paying for the rort

Rubbish.

Taxpayers aren't paying for it at all, it is the minimisation of THAT taxpayers Income tax that is payable, and an opportunity to drive a new car.

Your "honest taxpayer" quib smells of jealousy - it seems you don't aspire to anything beyond the mundane.

[jpd80]

Originally Posted by 2011G6E

Why the big hatred of people...ordinary workers...trying to do any little thing to minimise their already high tax burdens? Why are ordinary workers always penalised and made to feel like "cheats" if they can scrape any little access to some scheme that legally allows them to have a small advantage?

There was nothing legal about it. If you're not using your vehicle for work, then you're not entitled to the tax deductions.

The funny thing is that if you have a non-FBT work ute, then the new rules don't apply.
So I don't know why people just didn't choose a better vehicle to suit their situation..
There's no need for this wholesale disaster, people just get the willys when the ATO calls them..

And btw, it doesn't apply to current leases before the date of the ruling, they continue as normal.

[Brazen]

Originally Posted by jpd80

There was nothing legal about it. If you're not using your vehicle for work, then you're not entitled to the tax deductions.

The funny thing is that if you have a non-FBT work ute, then the new rules don't apply.
So I don't know why people just didn't choose a better vehicle to suit their situation..
There's no need for this wholesale disaster, people just get the willys when the ATO calls them..

And btw, it doesn't apply to current leases before the date of the ruling, they continue as normal.

It is a legal deduction, ATO staff are massive uses of salary sacrifice novated leases.

FBT exempt vehicles only apply if you do not do private driving (or incidental private driving). The exemption really applies to guy in the Telstra van who drives to his job from home with all the equipment. An office worker who leases a ute cannot get the exemption if they use the vehicle privately.

[jpd80]

What annoys me is that thje ruling right or wrong will not deliver one more cent to the government coffers.
It will most likely result in hardship to the businesses set up to service leasing, resulting in less tax income...

How odd, the government moves to close a loop hole and the nett effect is a whole lot of negative income...

[jpd80]

Originally Posted by Brazen

It is a legal deduction,

Only if the vehicle is used mostly for work. you can't use it to buy yourself a cheap private car.

FBT exempt vehicles only apply if you do not do private driving (or incidental private driving).

You are allowed incidental use on a work Ute, to and from home.

I can see both sides of this as I have been through several audits and was
exonerated both times due to comprehensive records and actual business use.

I know where these people are heading and believe me, the intent of the ruling
is to make people leave the system ahead of future full on audits.

The ATO itself will be having a huge purge of it own employees and their novated leases
as will the rest of the government...

[KIWI-1]

Originally Posted by Brazen

An office worker who leases a ute cannot get the exemption if they use the vehicle privately.

What if it's a Falcon Styleside (3/4 tonne payload)?

An employee's private use of a taxi, panel van or a utility designed to carry less than one tonne, or any other road vehicle designed to carry a load of less than one tonne (that is, one not designed principally to carry passengers) is exempt if their private use of such a vehicle is limited to:

• travel between home and work
• travel that is incidental to travel in the course of performing employment-related duties
• non-work-related use that is minor, infrequent and irregular – for example, occasional use of the vehicle to remove domestic rubbish

[Kieron]

My last 2 cars have been 100% private use novated lease of AUSSIE BUILT Falcons, next one was shaping up to be the new AUSSIE BUILT Territory. No novated leasing and I'm far less inclined to buy a new car and there are many people like me.

Those that are opposed to this should have looked into it for themselves while they could, it's not for everyone and the benefit is actually not that big but what it did do was keep the new car industry ticking over.

Simple answer is to keep it as it is but limit it to AUSSIE BUILT cars, that way it's an indirect way if supporting manufacturing rather than handing over large wads of Aussie taxpayers money and those taxpayers get to benefit too - win win and the govt. gets to pull in a few bucks to pay for its carbon tax losses.

[jpd80]

Originally Posted by Kieron

My last 2 cars have been 100% private use novated lease of AUSSIE BUILT Falcons, next one was shaping up to be the new AUSSIE BUILT Territory. No novated leasing and I'm far less inclined to buy a new car and there are many people like me.

Your situation is different to those people getting lower cost novated leases because
they have set up their paperwork based on the statutory 20% private use/80% business use.
Under any new leases, those people have to substantiate their business use but you are different,
100% private novated leasing still continues business as usual because you are not claiming anything.

[Fordman1]

Originally Posted by jpd80

There was nothing legal about it. If you're not using your vehicle for work, then you're not entitled to the tax deductions.
.

That's not right.

It is legal and the fact that private users are using the loophole doesn't make it illegal either.

The government should have conducted a phased withdrawal of the system rather than making an overnight change - 70 % of local produced cars are fleet, and regardless of what people say there are a huge number of user choosers binned in that number.

The impact on local manufacturers is more than a 20 % loss over the next 6 months without change in this policy. I would say it is closer to 40 %

[jpd80]

Originally Posted by Barraxr8

That's not right.

It is legal and the fact that private users are using the loophole doesn't make it illegal either.

Read additional posts above for clarity.
So many people claiming business tax deductions for what is basically non-business use.

The government should have conducted a phased withdrawal of the system rather than making an overnight change - 70 % of local produced cars are fleet, and regardless of what people say there are a huge number of user choosers binned in that number.

The impact on local manufacturers is more than a 20 % loss over the next 6 months without change in this policy. I would say it is closer to 40 %

I agree to a point but it's an industry heavily based on a lie, a loop hole caused by no ATO surveillance.
The ATO has been warning us for years about a crack down on business use of Novated leases,
a tightening of FBT statutory levels in 2011 proved to be small deterrent so now it's substantiation.

[PepeLePew]

This thread is living a long long life, considering nothing is concrete until the unlikely event of it passing into law it still makes for a interesting discussion, though reveals that for some its almost like black magic. Clearly employers have not in the past educated their staff of these options. Many from my experience just haven't as they've put it in the administrative too hard basket.

The government liaising with the industry on alternate incentives is a bit premature, and likely just an attempt to stem the negative press in the short term being expressed by the manufacturers and other segments of the industry, in the lead up to the god knows when federal election.

[KIWI-1]

Once the FBT industry gets their heads around things and changes practices I expect sales to bounce back.

What will make a difference is the following:
Work expense claims – tradies in focus
The ATO will focus on “incorrectly claimed” work deductions, concessions, offsets and credits”. It will pay attention to high claims made by building and construction labourers, construction supervisors and project managers and sales and marketing managers. High work-related travel expense claims will raise a red flag, as will “basic errors, poor record keeping, incorrect advice and deliberately false claims”.
The ATO says promoters often target self-funded retirees with tax planning schemes promising high investment returns and significant deductions, but that these do not comply with tax laws. “We will investigate domestic promoters and participants in these schemes and consider prosecution in appropriate cases.”

Reporting of PAYG withholding and fringe benefits
The ATO will review 17,700 businesses to ensure they are meeting employer obligations and will investigate employers who intentionally try to avoid their tax and super obligations by improperly treating workers as contractors rather than employees. It will undertake 950 reviews of employers to ensure they are meeting their obligations.
It will review 41,000 activity statement refunds to ensure businesses are correctly reporting their GST transactions and to identify instances of fraud.
The ATO also wants to identify employers who may have a fringe benefits tax obligation but are not in the FBT system. It will use third-party information to identify employers. It says recent compliance activity targeting car fringe benefits revealed that in many cases where there was an FBT adjustment, employers had failed to recognise and report their FBT obligations.

[olds]

Originally Posted by Barraxr8

Rubbish.

Taxpayers aren't paying for it at all, it is the minimisation of THAT taxpayers Income tax that is payable, and an opportunity to drive a new car.

Your "honest taxpayer" quib smells of jealousy - it seems you don't aspire to anything beyond the mundane.

If you have a genuine deduction (work related use ) then you can still claim . If you don't and have been making an illegal deduction then others have been paying for it. One of those others would be me

[Fordman1]

Originally Posted by jpd80

Read additional posts above for clarity.
So many people claiming business tax deductions for what is basically non-business use.

I agree to a point but it's an industry heavily based on a lie, a loop hole caused by no ATO surveillance.
The ATO has been warning us for years about a crack down on business use of Novated leases,
a tightening of FBT statutory levels in 2011 proved to be small deterrent so now it's substantiation.

I don't need clarity, I know what goes on.

I know that the local industry depends on fleet sales of which notated leases are a huge percentage.

The industry is based on a 'system' that the ATO knew about - the problem is that the government let it get to where it is now. And because the current government desperately need to get some money, they have elected to make the overnight change.

The Australian Auto Industry would have GONE 5 years ago without the "old" FBT rules.

[Fordman1]

Originally Posted by olds

If you have a genuine deduction (work related use ) then you can still claim . If you don't and have been making an illegal deduction then others have been paying for it. One of those others would be me

Nope.

That is not what big business, Healthcare, and Charity organisations have been told.

Deductions have not been illegal using the 20 / 80 rule on leases for those organisations.

This ( maybe ) post Sept 2013 is what will finally kill local auto manufacturing.

[jpd80]

Exactly who is being hit:

The car industry is concerned the rebate to government buyers of locally made cars will be ineffective and few buyers will take up the offer.

Last year government departments purchased only 4 per cent of all passenger cars sold in Australia (23,992 of 576,855) and 3.7 per cent of all SUVs (11,326 of 305,825), figures from the FCAI show.

However government buyers account for a greater percentage of locally made vehicles and up to 80 per cent of novated lease and salary packaging deals.
LINK

If this is true then the biggest affected group will be government workers and their novated leases, not private industry.

[Fordman1]

Originally Posted by jpd80

Exactly who is being hit:


If this is true then the biggest affected group will be government workers and their novated leases, not private industry.

NO the biggest affected group will be those employed in Local manufacturing of Automobiles or the system that leases these vehicles.

[nstg8a]

After talking to my boss about this last week he's made it clear that my work will go from its current 3 leased vehicles to just his one. In fact his partners Subaru just got replaced with a new one, on a normal finance arrangement.

So down to two already.

[1TUFFUTE]

Originally Posted by Spammy

Having spent considerable time in Sweden and having a relo who works in the Auto industry over there, I think I'm well qualified to respond to your points.

So for all those contributions they have Saab who has gone broke for the 5th time and doesn't build anything and Volvo which is owned by the Chinese.

As for Swedish education - I agree they all go to uni untill they are in their mid twenites...problem is they do nothing with that. They have loads of very well educated public servants...whereas Aussies have worked out to turn high level education and skills into profits.

Saab went broke simply because mothership GMH in USA handed of billions of tax debt to them before asking gov for more bailout from us government. Maybe your relative over there doesn't read the paper.

[burnz]

so do we have any sale's figures?

[Fordman1]

Originally Posted by burnz

so do we have any sale's figures?

3rd working day of the month.

So Monday burnzy

[jpd80]

Originally Posted by Barraxr8

NO the biggest affected group will be those employed in Local manufacturing of Automobiles or the system that leases these vehicles.

What annoys me is that Bowen says this will raise $1.8 Billion over four years, I call that BS
because IMO, they are counting on FBT and tax from business activity that's not gonna happen..

If the government wants to genuinely support the industry, come out and say so and start
counting measures like novated leases as part of that and approve the tax deductions
as industry incentives.

[KIWI-1]

Adding to what jpd80 said:
"The Government's rebate proposal excludes private individuals and company employees who want to take out a novated lease on a locally made car."

So public servants will buy Camrys and the rest will buy:
Toyota Corolla, Mazda3, Toyota HiLux, Hyundai i30, Ford Ranger, Mitsubishi Triton, Mercedes Benz C-class, etc.

Class warfare!

[2011G6E]

Originally Posted by Barraxr8

Rubbish.

Taxpayers aren't paying for it at all, it is the minimisation of THAT taxpayers Income tax that is payable, and an opportunity to drive a new car.

Your "honest taxpayer" quib smells of jealousy - it seems you don't aspire to anything beyond the mundane.

Exactly.
Look, it was never a "loophole", it was never a "quirk of the tax laws", it was never a "tax avoidance scheme". People used it to get a brand new car. They used to use their pre-tax income to make the (surprisingly high) payments on the vehicle which covered servicing and tyres and parts. That's what's been forgotten...many dealers get a staggering amount of their income from servicing lease vehicles...a huge percentage out here where many people have them. All that servicing will now drop right off as lease cars slowly drop off the map, meaning increased costs for everyone as they try to make up the shortfall.

Can't we just agree that practically no one had even bothered to think about who had a lease car and who didn't before Ruddles came out with his off-the-cuff, on-the-run "policy" announcement?
I'd never even thought of them until I came to work out here where they are a normal part of life for many ordinary families...never even gave them a second thought or angrily thought they were "ripping off the system".

It's just a typical Labor attempt to drive a "class warfare" battle again...they do it all the time...try to drive divisions in the community and raise up feelings of jealousy and "them and us" in some people against anyone who happens to be doing better than they are.

[KIWI-1]

Originally Posted by 2011G6E

They used to use their pre-tax income to make the (surprisingly high) payments on the vehicle which covered servicing and tyres and parts.

IMHO this will be the 'killer' of the salary packaging industry, not FBT.
Seems like a great idea... then you realise how much of cut the salary packaging industry is making through rebates on purchase price, fuel, tyres, insurance, servicing, etc.
Like others on this forum, been there, done that, never again.

[XR Martin]

Originally Posted by jpd80

What annoys me is that Bowen says this will raise $1.8 Billion over four years, I call that BS
because IMO, they are counting on FBT and tax from business activity that's not gonna happen..

Same with the cigarette tax increase.
The Government is assuming everyone will still consume the same amount of cigarettes, and not factoring in people possibly quitting or sourcing it from other means.