The Federal Government has announced a proposal to change the options available for calculatingÂ Fringe Benefits Tax (FBT) for salary-sacrificed and employer-provided cars.
What is the change?
The statutory formula method of calculating FBT for salary-sacrificed and employer-provided carsÂ will be removed. The removal is effective from 1 April 2014 but only applies to new contractsÂ entered into after 16 July 2013.Â Existing contracts (commenced prior to 16 July 2013) that are not varied in a material way willÂ continue to have access to the existing statutory rate for the life of the contract.Â The operating cost method of calculating FBT for salary-sacrificed and employer-provided cars isÂ not affected.
What does this mean for customers?
The Bank is currently assessing the potential impacts.Â Customers should seek advice from their tax advisor before entering into a new or variedÂ agreement for a salary-sacrificed and employer-provided car.Â We are awaiting further confirmation from Government with regard to the rules applicable whereÂ a purchase commitment for a vehicle has been entered into on or before 16 July 2013.
What do I need to do?
Prior to a customer signing a Novated Lease agreement, you need to:-
â€¢ provide the customer with a copy of the Fact Sheet prepared by the GovernmentÂ (attached to this notice).
â€¢ recommend that the customer obtain advice from their tax advisor before entering into aÂ new or varied agreement for a salary-sacrificed or employer-provided car.
For all enquires please refer to your Relationship Executive or Business Development Manager.