Changes to Car FBT Statutory Rates - Budget 2011

Good nes for Australian families!

In the 2011 Federal Budget, the government changed the statutory formula method for determining the taxable value of car fringe benefits by replacing the current statutory rates with a single rate of 20% that applies regardless of the distance travelled.


The changes apply to NEW contracts entered into after 7.30pm (AEST) on Monday 10 May 2011, and will be phased in over four years. There are no changes to novated leases entered into prior to this time.


For novated leases entered into after 10 May 2011 the following statutory formula transitional rates apply:



New contracts entered into after 7.30pm (AEST) on 10 May 2011
Distance travelled during the FBT yr
Existing
Contracts
From 10 May 2011
From 1 Apr 2012
From 1 Apr 2013
From 1 Apr 2014
< 15,000 km
26%
20%
20%
20%
20%
15,000-24,999km
20%
20%
20%
20%
20%
25,000-40,000km
11%
14%
17%
20%
20%
> 40,000km
7%
10%
13%
17%
20%

These changes make the family car one of the most effective tax savings available to employees and will drive novated leasing as the cheapest and most effective car ownership option for most Australian families.

Key benefits:
  • Retains current benefit for all existing novated leases
  •  Allows all Australian employees to access tax benefits regardless of how far they travel each year
  •  Simplifies the calculation and administration of FBT for employers which will allow a broader pool of employees to be able to benefit from vehicle salary Packaging
  •  Makes the packakging of additional family cars travelling low kilometres attractive (eg. spouse or univiersity student)
  •  Provies freedom fo explore alternate ways to travel to work including carpooling and the use of public transport.
Related posts:

==> What is a novated lease

==> Tax implications of novated lease


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