by Austblue on Wed Apr 02, 2008 2:27 am
I don't lease my car I bought it outright.
If you salary sacrifice you will generally pay FBT based on your kms travelled per year. If you want to avoid paying FBT you have to show that all use of the vehicle was work related as defined by the ATO
You're right about the car allowance it shows up as an income then you list your deductible expenses and that value comes off your taxable income.
i.e say joe blow earns 100k p.a and 10k of that is a car allowance but he spends 10k on the car (fuel, depn, interest, tyres, servicing etc.)
Joe blow will be taxed on an income of 90k only.
I get a $15k p.a car allowance and I won't pay tax on it at the end of the year. In fact at my previous company I didn't even get a car allowance but I still (legitimately) claimed the ute's expenses as a deductible expense reducing my taxable income.
IMO salary sacrificing/novated lease pros are:
fleet discount, they manage it all and maybe abn.
Cons: residual payout incl gst, restrictions on repairs and mods, high finance costs (12%vs 8.8%), you can't always transfer the lease it depends on your existing and new company's lease provider, then there's the lease providers which are a pita, you have a certain minimum k's travelled before it is worthwhile, blah blah
end of story is each situation is unique and needs a professional assessment.