I_Will_Freckle

We have been trying to figure this out and just can't work it all out. What would be better for us to do from financial point of view:

1) Take a 10K cut in salary and get a fully financed car plus all fuel

or

2) Keep the 10K and get our own car?

We can't figure out the tax position at all.

znaylor1974

Difficult one, I've just been through it myself. I'm guessing your talking about a novated lease, and 10K is $10k rather than £10k.

You're probably talking about a small car such as a Honda Jazz for Ford Fiesta, and you probably won't save a lot of money on tax unless you're doing big miles.
After a lot of analysis of the cost benefits for myself, I couldn't figure out what the best option was (buy myself or novated lease) and I ended up going for a Novated Lease on a Toyota Corolla Conquest. Basically it was the least hassle and I my company pay 10% towards it.

I still don't know how much the car actually costs due to the reduction in salary and so tax incentive that comes with it.

Sorry I couldn't be of more help. My company now recommend Toyota as they have just bought a large leasing company (Leaseplan I think) and they are supposed to be the most profitable/easiest to manage/cheapest to lease.

Hope this helps in some way.

tictac

I'd say it's almost impossible for anybody on here to answer this question on your behalf without knowing:

a/ What tax bracket are you in?
b/ What is your annual business mileage projection?

FBT, IMO, is the key consideration when talking about (what the UK used to call) "benefits in kind"

It's always best to pay and talk to an accountant on these types of matters

Cheers

I_Will_Freckle

Thanks for the replies. I'm coming to the conclusion that we should speak to an accountant too. The whole tax thing in Australia is a bit mind blowing.