Fringe Benefits - Unreimbursed running costs?

Submitted: Saturday, Apr 01, 2006 at 23:46
ThreadID: 32438 Views:2257 Replies:5 FollowUps:2
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I've got some paperwork from the mob who run my salary sacrifice deal on my Fourbie.

I' ve had to declare the more than 25K for the year over the phone recorder thing but then I have some forms that allow me to send in receipts for unreimbursed running costs [excluding lease payments] that have not already been claimed. These are then able to reduce the taxable value of the motor vehicle and the employees FBT liability.

Everytime I try to speak to someone at the place that runs it I get someone who has English as a second language and I can't get the answer to the questions I need answered. No its not an Indian based call centre, its actually smack in the middle of downtown Melbourne.

Can anyone on here tell me if i submit the documents for the unclaimed costs, which totals about $1600, what does that do to my FBT liability?

How or where do I get the benefit of that reduced FBT liability? Do I end up with a cash return to me or a reduced bill somewhere else and if so which one is better for me.

To quote the papers that I have been sent the example given is [word for word]

"at the end of the FBT year the employee submits an amount of unreimbursed running costs of $150 which reduces the Taxavble Value of the vehicle calculated below:

Taxable Value $25,000 x %20 x 365/365 - $0 = $5,000

New Taxable Value $25,000 x %20 x 365/365 - $150 = $4,850

In this example the employees unreimbursed running costs of $150 reduces the employees FBT liability by $155 [* I think thats a boo boo and it should read $150]"

My eternal thanks if I get an answer that makes sense to me.

Point of interest my car has a taxable value of 56K and a statutory percentage of 11% and was available for every day of the year.


Dave [Moneypit]
Back Expand Un-Read 0 Moderator

Reply By: Trekkie (Member - WA) - Sunday, Apr 02, 2006 at 01:56

Sunday, Apr 02, 2006 at 01:56
There are a lot of variables in this that can change the correct answer
As it is past 31 March (end of FBT year) you may not be able to change last years FBT figures. You may be able to submit the $1600 unreimbursed amounts and be reimbursed. Depends in part if you are on FBT method or ECM method. Is the mob in Melbourne McM S
email me if you wish and I can try to point you in the right direction.
AnswerID: 164338

Follow Up By: Footloose - Sunday, Apr 02, 2006 at 07:26

Sunday, Apr 02, 2006 at 07:26
We looked into salary sacrifice for my wife. It seemed an awful lot of sacrifice when the vehicle had to be sold/bought after a few years.
FollowupID: 419214

Follow Up By: Moneypit - Sunday, Apr 02, 2006 at 15:24

Sunday, Apr 02, 2006 at 15:24

You have PM


FollowupID: 419265

Reply By: Member - Stan (VIC) - Sunday, Apr 02, 2006 at 08:45

Sunday, Apr 02, 2006 at 08:45
AFAIK it works as follows:

56000 * x 11% = $6160 the amount of FBT which payable for the year.

With Unreimbursed running cost there 2 options:

1. If you got enouth money in your salary package account available - to claim it
as a standard deductions (tyres, service, parts, etc).

2. If you don't have enouth money in your account for reimbursent - claim them
on this form. And because you paid for them from your after tax money they will
substruct it from your FBT for the year.
So 56000 * x 11% x 365/365 - 1600 = $4560

Now how they refund you this amount I am not sure I a always claimed the deductioins using option 1.

Hope this helps

AnswerID: 164355

Reply By: bmwrider - Sunday, Apr 02, 2006 at 20:09

Sunday, Apr 02, 2006 at 20:09
I also have a salary sacrifice with 25000km pa. There is an opportunity to reimburse any unspent funds in your "bank" each FBT year. But it must be claimed prior to the 25th March each year otherwise it rolls over to the next FBT year. You do not lose the money. It stays in your bank and you can use it for any unexpected running costs. Any alterations to your FBT liability can be dealt with by your accountant when completing your tax return. Hope this helps.

AnswerID: 164452

Reply By: Wizard1 - Monday, Apr 03, 2006 at 14:14

Monday, Apr 03, 2006 at 14:14
I am a little confused. I too have a novated lease as part of a salary sacrifice. But I fail to see what running costs have to do with the FBT liabilty.

Your FBT liability is assessed against the value of the vehicle at the commencement of the lease and doesn't change, as far as I know. The only variable with your FBT liability is how many KMs you estimate you will travel.

I can claim all I like against running costs but it has nothing to do with FBT liaibility. Your running costs lower your tax as they come out of your salary, they don't effect FBT.

Running costs are just that and do not effect the value of the vehicle. Certain items cannot be claimed against a novated lease running costs. These include roof racks, bull bars, CB radios, etc unless they were on the vehicle at the start of the lease and gross up its value.

What sort of "running costs" are you attempting to claim?

Gold Coast
AnswerID: 164559

Reply By: bmwrider - Monday, Apr 03, 2006 at 19:56

Monday, Apr 03, 2006 at 19:56
Your circumstances may change, you might start using more kilometres, your fuel usage may be greater, towing, desert/sand driving, breakdowns/punctures may occur that may not be covered by warranty. 25000km pa is 1 km into the 11% FBTscale, your running costs (lease fees) are calculated on the distance you nominate. If you increase your driving distance your runnning costs will change. The next FBT scale change occurs at 40000km pa (7% I think). The other thing to remember is that at the time the lease expires you have to pay out the residual. If there are funds left in your "bank" they are returned to you. The same as if you sell the car for more than your predetermined residual (determined by the ATO)that excess is yours tax free (as long as the ATO does not believe you are in the business of profitering. This is why it is important to select a vehicle with a high resale value.


AnswerID: 164610

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