Get on the road with an
FBT EXEMPT
EV Novated Lease
NOVATED MOTOR VEHICLE LEASES
(ATO REFERENCE: IT2509)
A novated lease is a tri-partied financial arrangement between the employee (as the lessee), financier (as the lessor) and the employer. The following diagram outlines the process associated with including a novated lease as part of your salary package:
Figure 1: Associated motor vehicle lease
DEFINITION
WHAT IS A NOVATED LEASE?
In a novated lease agreement, the fleet manager leases a vehicle to the employee and novates the responsibility to pay for the lease to the employer. During the lease term, the employee will have full and unrestricted use of the vehicle. In the event of an employee termination of (resignation, redundancy or other termination), the novation agreement expires and full accountability reverts to the employee. The vehicle remains the responsibility of the employee. The transfer of arrangements from one employer to another is a simple transaction for the employer and employee.
RELATIONSHIP MANAGEMENT
- An employee’s requirements will be discussed with the fleet manager to ensure the right vehicle is quoted and the price is sourced
- The fleet manager can source the vehicle and accommodate any existing relationships employees may have with vehicle dealerships
- We can offer a finance lease or an operating lease option for new and some used vehicles
- After the package is accepted, the vehicle will be delivered to an agreed location
- All other inclusions to the package will be based on the nominated kilometres
- Reports showing utilisation of the budget and fringe benefits will be available on a regular basis
- The package can be changed anytime within the lease to ensure that it meets the vehicle operating costs
- Three months before the lease ends the driver will be advised to ensure smooth changeover of the vehicle.
FULLY MAINTAINED LEASES
Besides the financial component on the lease, employees can have the opportunity to benefit from a fully maintained lease where the monthly lease payment also covers all running costs of the vehicle, including:
- Electricity Charging Costs
- Registration
- Insurance
- Maintenance
- Roadside assistance
- Tyres
Advantages of a fully maintained lease include:
- Normally non-deductible motor vehicle operating costs become a pre-tax deduction
- Allocating a fixed monthly payment for motor vehicle expenses that protects the cash flow of the employee
- Eliminating out-of-pocket expenses of operating the vehicle for the term of the lease.
Figure 2: Novated lease process
CHARGING COSTS
You can recover the cost of charging at a commercial charging station by submitting a claim via our Driver Portal.
If you are charging at home, charging costs can be claimed on a cents per km basis at the prevailing ATO published rate.
REPAIRS, MAINTENANCE & TYRES
When your new car is due for a service or needs new tyres, simply book it in with the Dealership or one of our Approved Tyre & Mechanical Partners. Approval and Payment will be arranged by Alliance Fleet and you can relax….just pick up your car when it is ready!
REGISTRATION & INSURANCE
When you receive your Registration and Insurance Policy renewals, simply email them via your Driver Portal or email: admin@trintias3.com.au and the Fleet Team will pay these on your behalf!
EXPENSE REIMBURSEMENTS
If you have any “out-of-pocket” expenses in relation to your lease, these can be reimbursed to you directly from your fleet account. For Example:
- If you pay your Insurance or Registration directly: Send through the Tax Invoice and Receipt for payment and these funds will be paid back to you;
- The same applies to expenditure on Fuel, Servicing or Tyres etc.,
Simply email the receipts via your Driver Portal or email: admin@trintias3.com.au and the Fleet Team will reimburse you the costs!
Important Information
REPORTABLE FRINGE BENEFIT AMOUNT
While there is no FBT to pay, your employer must include a Reportable Fringe Benefit Amount (RFBA) on your Annual Payment Summary.
This is calculated as:
(Purchase Price x 20%) x 1.8868
Drivers must be aware that the RFBA can affect Centrelink Payments such as Family Tax & Child Care Benefits, HECS/HELP liabilities and other social security arrangements. Please visit the MyGov website to calculate the impact on your personal situation.