Blog & Updates

Budget 2015 – Changes to the way you can claim work related vehicle expenses.

Author: Barry Scott / Published Date: 14 May 2015

Categories: The Autopian, Consultancy

First of all, none of these changes affect anyone who has salary packaged a car with a novated lease. They only affect people who use their car for work, and then claim a deduction in their tax return.

- Removal of two methods of deduction
- Changes to the 'Cents per Kilometre' method

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UN Women Whitepaper Preview – The Meritocracy Myth

Author: Barry Scott / Published Date: 17 April 2015

Categories: Events, Consultancy

Autopia and UN Women are working on a major whitepaper to be launched at the upcoming event ‘Driving Gender Diversity in the Workplace’ in the Intercontinental Hotel, 12th May, Sydney. Download the preview 'The Meritocracy Myth' here.


- More details on the event here

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A revolutionary way to save thousands on a car!

Author: Barry Scott / Published Date: 21 August 2014

Categories: Team Updates, Events, Consultancy

Go Drive Business is a groundbreaking car ownership program that saves sole traders, professionals, business owners and company directors thousands of dollars, an unbelievable amount of time, and takes care of all the complicated tax issues at EOFY.

Designed for those with complicated income streams, it removes all the hassle from buying, running and selling a car. One phone call and we take care of it all.

We even absorb the variability of costs, flattening them into one set monthly expense to help you manage your cash flow.

Buy One phone call is all it takes:
        - Fleet discounts on purchase price
        - Vehicle selection advice and depreciation modelling
        - Finance and tax strategy to maximise deductions

Run One set monthly cost for:
        - Fuel, finance, insurance, registration & CTP
        - Discounted servicing, tyres & repairs
        - 24/7 Emergency support
        - Discounts on servicing, tyres & repairs
        - Intelligent Tax Pack (EOFY & FBT)

Sell We even help you sell the vehicle:
        - No nonsense valuation
        - Convenient pick-up service

- Find out how it all works here
- Click here and we'll call you back whenever it's convenient
- Call 1800 288 674 and find out how easy it is to save thousands now
- Download: 'The Essential Guide to Car Finance'



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Superannuation increase and its effect on Employees, and Salary Packaging Cars

Author: Barry Scott / Published Date: 9 July 2013

Categories: Novated Leasing, Consultancy, The Autopian

Extract from:
The Autopian | Winter 2013 Sign up here
Leading edge commentary on the vehicle benefits industry


The 2013 Federal Budget announced two changes that will indirectly influence salary packaging - the increase of the superannuation guarantee and the Medicare Levy. Here's how:

Impact of super increases on novated leases

The compulsory superannuation guarantee rate used to be 9%. On 1 July 2013, it increased to 9.25%. Should Australia have a Labor Government post September this year, the rate will gradually increase to a compulsory 12% by 1 July 2019. If we have a Liberal Government, the 12% rate will be reached two years later in 2021.

Year
Labour
Liberal

1 July 2012

9.00%

9.00%

1 July 2013

9.25%

9.25%

1 July 2014

9.50%

9.25%

1 July 2015

10.00%

9.25%

1 July 2016

10.50%

9.50%

1 July 2017

11.00%

10.00%

1 July 2018

11.50%

10.50%

1 July 2019

12.00%

11.00%

1 July 2020


11.50%

1 July 2021


12.00%


So what effect will this have on salary packaging?
Firstly, let’s reflect on what this means to employees in general.

Award employees: For employees covered under an Award, employers must bear the cost of the increased superannuation rate. This means that as superannuation contributions increase, so too does their total package. Taxable income, tax payable and disposable income remains unchanged.

‘Fixed remuneration’ employees: For employees paid a fixed remuneration package, superannuation balances will increase, and this will be funded out of their existing total package. The result of this will be a decrease in taxable income, tax payable and disposable income.

‘Base + super’ employees: For employees paid a base salary plus super, employers will need to choose whether the organisation, or the employee, funds the superannuation increase.
- Where the employer funds the increase, there is no impact on the employee’s taxable income, tax payable or disposable income.
- Where the employee funds the increase, again this will be afforded through the employee’s existing total package. The result of this will be a decrease in taxable income, tax payable and disposable income.   

Effect of Super Increase on Remuneration
 
Award employees
Fixed remuneration employees
Base+ Super employees

Who covers
the increase?


Employer


Employee

Employer
or employee


Superannuation balances

 

 

Increases

 


Increases

 


Increases


Taxable income


No change


Lower


Lower (employee bears cost)


No change (employer bears cost)


Tax payable


No change


Lower


Lower (employee bears cost)


No change (employer bears cost)


Disposable income


No change


Lower


Lower (employee bears cost)


No change (employer bears cost)


The new reality

A significant segment of the Australian work force is going to be funding the super increase out of their existing remuneration package. While a lower level of tax payable is always welcome, it's not usually associated with lower disposable income, as is the case now. Depending on the outcomes of your organisation’s annual remuneration review, employees may not immediately realise the negative impact on take home pay.

Inevitably though, they are set to face the challenge of making their diminished disposable income stretch further than it had to in the good old 9% days.

Sign up to The Autopian for more on the Medicare Levy Increase and its influence on novated leasing.

Doing more, with less
Employees will not be the only group faced with this challenge. HR departments will be under increasing pressure to alleviate the pain outlined above – and they’ll have to look for the means to improve their overall employment offering, without having the luxury of splashing the cash around.

The key is that employees’ disposable income is going to decrease, and so the desire to squeeze more value from a smaller pool of money will be paramount.

Novated leasing helps employees, and employers, do more with less.
It increases an employee’s after-tax benefit by increasing their tax savings.
It allows an employer to provide that increase without digging into their own pockets, and of course, it helps reduce your payroll tax at the same time...

Summary
While there is no direct effect on novated leasing (the increase in superannuation will not make it any more, or less, tax effective than before, and the rate of super contribution will be the same for an employee whether they package or not) the fact remains that there will be a decrease in take home pay for many employees.

Combine these new realities, with the recent FBT legislation changes, and vehicle salary packaging will become more attractive than ever before for employees. Employers too, will seek to maximise the opportunity to promote this benefit more aggressively than in previous years, especially now that FBT risk has significantly diminished.

Sign up to The Autopian for more on:
- FBT Risk is Dead
- Driver Savings
Continue to Increase
- Low KM Drivers Continue to Increase
- Medicare Levy Increase: Effect on Novated Leasing

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The Autopian | FBT Risk is Dead

Author: Barry Scott / Published Date: 26 June 2013

Categories: Novated Leasing, Consultancy, The Autopian

The Autopian

Leading edge commentary on the vehicle benefits industry l Winter 2013 
Sign up here

  • FBT Risk is Dead
    A landmark development that has the potential to benefit every employer, whether it’s currently offering novated leases or has resisted until now.
  • Low KM Drivers continue to increase
    Now that the incentive for higher kms (as well as penalties for not achieving them) have been largely eliminated, employees are happy to spend less discretionary time on the road and save on their running costs.
  • Tax savings continue to increase
    One might have predicted a reduction in savings this past year, as the tax rate for those driving >25,000kms pa moved from 14% to 17%. But that's not what happened...
  • Superannuation increases – effect on salary packaging cars
    Depending on your remuneration approach, the increase in the superannuation guarantee will affect your employees, and the relevance of novated leasing, in different ways…
  • Medicare Levy increase – effect on salary packaging cars
    As the Medicare Levy moves from 1.5% to 2%, how will this affect novated leasing?
  • Autopia appoint new CEO
    After 9 years in the driving seat, founder & Managing Director of Autopia, Jeffrey Morton, has appointed David Wakeley as Chief Executive Officer. [More here]
  •  Inside Autopia with: Geoff Payne
    Sales Manager Geoff Payne has been with Autopia for over five years, you could say he knows a thing or two about cars, and novated leasing…
  • Autopia driver survey results
    "The customer service was excellent. At all times George was clear and concise, explaining the technical aspects of the product I was purchasing. I also believe having the one point of contact throughout my lease period will be extremely beneficial." James Spurway, Challenger Financial Service Group

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