Posts Tagged 'FBT'

Sky News Business Interview

Since the Rudd Government FBT announcement and the federal election in September, there has been a fair bit of media coverage surrounding the car and salary packaging industries and the impact on our business and consumer confidence.

A few weeks back I was invited to Sky News Business to discuss how Smartsalary has been impacted since the July announcement, I was happy to be able to say that business is back to usual! Here’s a video of the interview:

Smartsalary recruitment freeze lifted

The recently proposed changes to FBT legislation for novated leases have caused significant disruption across the automotive and salary packaging industries. As a matter of precaution during this time, we have implemented a number of cost management measures, including a freeze on all recruitment.

Despite the uncertainty brought about by the proposed changes that were announced on 16 July, Smartsalary chose to retain 100% of staff during this time.  Furthermore, we are hopeful that it will be business as usual following the election on 7 September 2013.

To ensure we are prepared, we’re recommencing recruitment for a number of positions across the company over the coming weeks.  To be prudent, no offers will be made until after the election, however we invite you to keep a look out for available opportunities in the Careers section of our website.

We would like to thank our loyal clients and our dedicated staff who are helping to see us through these difficult times.

Careers site screenshot

Industry Bodies Respond to Proposed FBT Changes

Since the Federal Government announced proposed changes to FBT legislation on 16 July, the automotive industry has been aflutter anticipating the impact on the industry’s future. Kevin Rudd’s government have said little since the announcement and the federal opposition have vowed to scrap the changes and support the car industry if they’re elected.

This weekend Andrew Bolt’s Bolt Report saw Australian Industry Group CEO Innes Willox label the proposed changes as an “ill-thought-through decision”, adding that the Treasury “didn’t actually model the impact on car sales when they put that together“.

Tim Robert’s of leading industry body Australasian Fleet Management Association (AfMA) explains the impact the FBT changes could have on dealers, manufacturers, fleet managers and lease providers in their video response to the proposed legislation change:

With the federal election a little under five weeks away, AfMA are encouraging those who’ll be impacted by the changes to share their concerns.

You can email AfMA: info@afma.net.au
Treasurer: chris.bowen.mp@aph.com.au
Shadow Treasurer: j.hockey.mp@aph.gov.au

Drive less and save more with a novated lease

Recent amendments to the fringe benefits tax (FBT) regime are having the intended effect of discouraging excessive driving according to statistics gathered by Smartsalary.

In the past, novated leases were subject to a sliding scale of taxation. If you drove less than 15,000 kilometres a year, you were taxed at 26%. Alternatively, if you racked up more than 40,000 kilometres a year – you were only taxed at 7%. This has the unwanted side-effect of people driving extra kilometres just to make an FBT bracket.

That changed in May 2011 when the Federal Government implemented a key recommendation of the Henry Review – a series of taxation changes proposed by Treasury Coordinator Ken Henry. Under the new rules, all drivers enjoy the same tax rate (20%) regardless of kilometres driven. This had an immediate impact on our statistics, changing the way customers use their vehicles.

Prior to May 2011, only 4% of drivers who packaged a novated lease with Smartsalary drove less than 15,000 kilometres a year (see chart above). That number quadrupled to 16% in August 2012. The changes also impacted other brackets. For example, the percentage of customers driving more than 25,000 kilometres a year has dropped significantly.

From these results we can infer that the taxation changes have not only discouraged excessive driving but have also broadened the appeal of salary packaging a novated lease to customers who drive shorter distances. This is great news for motorists and the environment.

Video update: 2011 Federal Budget

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January 2012 update: For the latest information about the 2011/12 novated lease budget changes, please click here.

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Earlier today we filmed an interview with Simon Ellis, our Senior Tax Advisor. In this video, he outlines his thoughts on the recently announced changes in the 2011 Federal Budget and how they will impact salary packaging. A written summary can also be found here.


Deven Billimoria
Chief Executive Officer
Smartgroup

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