My husband has a novated lease on our car through his work. During the last FBT year, our car was involved in an accident (not our fault) and it was off the road for 45 days being fixed as it was very badly damaged. During that time we had a hire car and did approx. 4000 km on that car. We are now being asked for a KM reading from our car and its about 3000km under what we should have done for the year. We are being told by my husbands work that they can’t take into account the 45 days we couldn’t drive the car or the 4000 km we did on the hire car so we will have to pay FBT at 20% instead of 11%. This seems extremely unfair as this was out of our control. Does anyone know if this is true and what we can do?
Thanks very much!Sarah Melbourne
Hi Sarah,
I don’t believe this is correct.
As I understand it there is capacity for an individual to declare that the vehicle was not used (repairs etc) for an extended period of time and that this is taken into consideration when determining FBT liability.
However, in saying all of that, I would suggest that you contact the group who manages the salary packaging or the ATO.
Please note the information I have provided will need to be cross checked.
Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958
Skype – derekjones2113Thanks Derek. I decided to call the ATO and apparently its correct. Although there is a ruling where you can declare unavailable days, this is not taken into account to determine the FBT rate. It is used once the FBT rate has been determined and will reduce the liability slightly. This doesn’t really help us as we are under the 25k km for the year so our FBT rate changes from 11% to 20%, costing us about $3k extra. The ATO agreed it seemed unfair as the accident wasn’t our fault and sujggested we apply for a private ruling. Has anyone had any experience with these, how long they take etc.?
Also on a different note, I want to apply for a tax variation for the first time. When does it have to be lodged by for next financial year and what is a reasonable price for an accountant to charge for doing this?
Thanks!!
Sarah Melbourne
Hi Sarah,
Bugger the FBT thing.
As for ITWV – keep your eyes peeled on the ATO website from late April when they will post the forms for the 06/07 financial year.
I try to get my ITWV in as soon as possible after they are posted on the website and generally do all of the preparatory work beforehand.
An accountant will generally do these for a typical fee – the ITWV can be done by anyone if they are a little number savvy.
Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958
Skype – derekjones2113I got a private ruling a few years back and I think it was all said and done in around 6 weeks.
Tools
Thanks Derek, I might give it a go myself then. I was worried that the ATO would want them lodged by an accountant rather than the individuals.
Thanks for the info. Tools, were you successful with your ruling? Did you just send all the information to them and wait for a reply or did they contact you to discuss the situation?
Sarah Melbourne
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