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Australian Model Y Waiting Room
- Thread starter Joe__B
- Start date
Power Hungry
Member
Doesn't directly affect it, but for those on the middle income tax brackets (32.5% and 37%), the rate drops to 30% from July 2024 so there is incentive to start the lease earlier to maximise ta savings
Thanks.
Is there a dedicated thread anywhere regarding novated leasing in Australia? I have been debating about getting a Tesla on novated lease. One key thing worrying me is that from what I understand my company will need to report my RFBA to the ATO which will increase my reportable taxable income and will then negatively impact on what subsidies I can claim back from childcare rebates etc For example as I understand, it means if the lease company gets paid say 12k of my tax per year to pay for the vehicle then in the eyes of ATO my reportable income is 12k extra which actually lowers what I claim back from childcare rebates as an example. I wonder has this been discussed in here anywhere?
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[Zombie]
Member
RWDs have FS VINs, Long Ranges have EK VINs and Performances have EL VINs.
See this VIN decoder for details
The RFBA just means that the lease doesn't lower your income for the purposes of those rebates, but it doesn't raise it either.
Eg. If you get paid $112,000 before tax, and $12,000 goes to the lease company for the car, your taxable income will be $100k (what you pay tax on), and you'll have a RFBA of $12,000 so your income for rebates, child support etc purposes will still be $112,000.
Hi catham8,
It is risky taking tax or financial advice from randoms on the internet. For what it is worth, what you have said above sounds right to me. That's not just for novated leases, but includes other fringe benefits. My understanding is that with EVs, you don't pay the FBT, but you do count the reportable fringe benefit for Centrelink calculations, etc. Professional/authoritative advice is warranted here.
Elite Display
Member
Then there is a chance that that VIN is correct and they just released/assigned them early but took it back for whatever reason.
Hey, action is action... right!? haha
Elite Display
Member
2095 Model Ys were delivered in the month of April:
www.carexpert.com.au
For context, 1938 Model Ys were delivered in March: VFACTS: April 2023 car sales headlined by EV growth, Toyota slump
Article is quite clear that the number is referring to vehicles delivered.
The number is going to crater if the ports don't get their act together in May.
VFACTS: April 2023 car sales headlined by EV growth, Toyota slump
Electric vehicles hit 8.0 per cent share as both Teslas make the top 10, while market-leader Toyota continues to struggle with deliveries.
www.carexpert.com.au
For context, 1938 Model Ys were delivered in March: VFACTS: April 2023 car sales headlined by EV growth, Toyota slump
Article is quite clear that the number is referring to vehicles delivered.
The number is going to crater if the ports don't get their act together in May.
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Yeah, but then June might look huge!2095 Model Ys were delivered in the month of April:
VFACTS: April 2023 car sales headlined by EV growth, Toyota slump
Electric vehicles hit 8.0 per cent share as both Teslas make the top 10, while market-leader Toyota continues to struggle with deliveries.
For context, 1938 Model Ys were delivered in March: VFACTS: April 2023 car sales headlined by EV growth, Toyota slump
Article is quite clear that the number is referring to vehicles delivered.
The number is going to crater if the ports don't get their act together in May.
This ^^ correct. Speaking here as someone that works in tax, I would also caution you to get proper advice on this and also not just rely on the shiny brochure that the NL companies will give you or *shudders* internet forums. Some of their claimed savings from novated leases are a bit dubious/ calculated in a very clever way which doesn't necessarily show you the full picture.
Information
Novated leasing reduces your taxable income which (for now for EVs - don't assume this will always be the case) gives you a tax break equal to the marginal tax rate (i.e what tax bracket you are in) multiplied by your lease payments. So, if you are in the 45% tax bracket, a $1,000 lease payment per month will generate $450 of tax savings.
The Reportable Fringe benefit (RFBA) is there to ensure that you don't get a tax break and a break on things like HECS, child support etc. Not politically palatable to have people paying less child support just because the Govt wants to encourage EVs.
Thanks Matt. To be 100% clear did you agree with how cafz explained it i.e. taxable income and specifically child support benefits will effectively remain the same because whatever amount is deducted pre tax to pay novated lease company will be added back on as the RFBA? Thanks again.
I have contacted a couple of tax agents close to where I live and they dont have a clue about this stuff to be honest and also just want me to lodge a tax return instead of just charging me a consultant fee for advice. I need to find an accountant / tax agent who is up to speed with it.
I also agree that the novated lease companies quote are indeed half marketing, as they put the 'tax savings' in big bold letters etc.
Please take this extra as a grossly oversimplified overview of where you should get to. I stress that this is information only.
If you take out a Novated Lease today on an EV which is eligible for the Fringe Benefits Tax (FBT) exemption:
a) Your taxable income should be reduced by the lease payments deducted from pre-tax by your employer. This means you would, all other things being equal, get a tax benefit. This benefit you get to keep, even allowing for the RFBA point at b) below.
b) Without being overly specific, child support/ HECS etc payments would probably remain unchanged. This is because your child support/ HECS repayment base (i.e. what your repayments are calculated on) is much broader than just pure taxable income and is designed to try and capture as many things as the government thinks should be included to determine your yearly earnings. One of the things included is the RFBA.
This is why I said above, the Government is happy to give you an income tax break because you are helping the take-up of Electric Vehicles. It won't, however, let you get a tax break and a break on your other obligations such as child support/ HECS.
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