FBT on Novated Vehicle

[mark213]

Sorry if this isnt the right place to post this - just have a question on FBT liablity on my novated vehicle.

My employer said there has been a shortfall in payments for FBT in 2012 tax year primary due to the valuation of the vehicle....

What happened was:

• When i joined my employee the FBT value of the car - cost base was 57k
• The finance ran out a year later, and instead of getting a new car, i refinanced the existing car for another year whilst i was still looking.
• My novated leasing company adjusted the FBT cost base in the refinance amount down to the current market value of the car - to be 32k and restructured the payments.
• Resulting was a drop in monthly payments to the leasing co....

My employer said this re-valuation should not have occurred on re-financing and is now requesting the shortfall in FBT as this is where it lies...

The leasing co believes it allowed to do this...

As the obligation is on the employer to collect the tax it seems there isnt much I can do. The employer also wants to collect it post tax, where as the leasing co says it can be pre-tax??!

If anyone has any advice here, it would be appreciated.

 

[Deena]

I can't answer any of your other questions.

I can't recall the ins and outs of refinancing but I know when I took my lease out nearly five years ago, it was not a good financial move to refinance. Did you do your due homework before you did this?

I thought you could only pay the FBT post tax, thats what I do.

 

[mark213]

Re-financing was only for a year to work out what to do - we were in the middle of a few things personally so wasnt in the mood for sourcing a new car for another 3 years at that time......

I can't answer any of your other questions.

I can't recall the ins and outs of refinancing but I know when I took my lease out nearly five years ago, it was not a good financial move to refinance. Did you do your due homework before you did this?

I thought you could only pay the FBT post tax, thats what I do.

 

[vaughan]

You enjoyed the fringe benefit of the car so you are liable for the tax.

How much FBT are you talking about?

 

[luckyone]

Yeah, they can't readjust the cost base of the vehicle until the car is 4 years old. So if you car was younger than this then unfortunately I think you'll have to pay the money.

My car lease company tried to do this to me too, but thankfully I suspected it was incorrect and looked it up.

 

[rugrat]

I know when we looked at refinancing, they could only use the residual value rather then the primary value if we had a break of about three months between leases.