LeasePlan Novated Leasing Presented by Peter Boutros

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LeasePlan Novated LeasingPresented byPeter
Boutros Trevor Warner
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• Novated Lease Structure

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Components of a Novated Lease

• Purchasing of the vehicle
• Lease rental
• Vehicle maintenance and repairs
• Comprehensive insurance
• Fuel
• Tyres
• Registration CTP
• Other Provisions
• Auto Club membership
• FBT liability (reporting)

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The ATO Guidelines Residual Values
12 months 65.63
24 months 56.25
36 months 46.88
48 months 37.50

• Option to use LeasePlan estimated lease end
  market value when considered less than minimum
  ATO guidelines

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Employee support services

• National Novation Centre (specialist LeasePlan
  in-house department)
• Novated User Guide
• LeasePlan Online Internet Novated Solution
• Monthly Vehicle Report including FBT
• LeasePlan monitoring of usage and cost
  performance
• 24 hour 7 day a week maintenance support
• End of lease support
• Early termination support (leaving employment)

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Employee Benefits
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The benefits of a Novated Lease

• Choice of vehicles- includes secondhand cars
• Major savings on the vehicle purchase price
• Minimise GST/ Pre-tax savings on lease
  operating costs
• Residual Value helps build equity in vehicle
• Opportunity of a tax free benefit at end of lease
• Major savings on operating costs through fleet
  management controls
• Optional Involuntary Redundancy
  InsuranceConditions apply

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Fringe Benefits Tax (FBT)
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Fringe Benefits Tax (FBT)

• Fringe Benefit Tax (FBT) is an employer levied
  tax which you contribute to via a salary
  deduction.
• The calculation is based on annual kilometres
  travelled between 1 April and 31 March.
• The estimated FBT liability calculation from your
  quote is based on your nominated kilometres.
• Your monthly report will assist you in monitoring
  your FBT liability by tracking your actual usage.
• FBT is based on actual kilometres which are
  calculated at the end of the FBT year (31 March).
• Annualised kilometres.

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Calculating FBT Liability

• The Statutory method is based on actual distance
  travelled per FBT year for the of calculation of
  FBT

0 -14999 k per annum 26
15000 - 24999 20
25000 - 40000 11
40001 7
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• Fringe Benefits Tax (FBT)
• What happens if you do not make your kilometres?
• Based on an FBT Base Value of 33,375.10

FBT Base Value Annual Kms Statutory Fraction FBT Liability
33,375.10 12,000 26 8,331.17
33,375.10 15,000 20 6,408.59
33,375.10 25,000 11 3,524.72
33,375.10 40,001 7 2,243.01

• It is therefore important to be realistic about
  your budgeted kilometres,
• otherwise you may incur additional costs to your
  package.

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Employee Contribution Method (ECM)
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What is ECM?

• ECM is where the employees make post-tax
  contributions towards the cost of operating the
  vehicle
• Legitimate way of reducing FBT liability
• The post-tax contribution reduces or eliminates
  the FBT
• Can lower the overall cost of packaging a vehicle
• Makes salary packaging more attractive to all
  employees who earn up to 180,000 per year

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How ECM is calculated?

• Vehicle FBT Base 30,000, 25000 km, Full Year
• What ECM is needed to make the FBT liability NIL?
• Calculate FBT Taxable Value?
• FBT Taxable Value FBT Base value x Stat Rate
• FBT Taxable value (30,000 x .11 )
• Therefore FBT Taxable Value 3300
• Employee Contribution needs to be 3300.

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ECM Benefits - Example
Based On a vehicle lease over 36 months
travelling 15,000 kms per annum.
Vehicle Lease Costs GST (no FBT)
Vehicle Lease Costs FBT
Post tax contribution ECM required to offset FBT
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What to expect during the lease
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What to expect during your lease

• Drivers kit and fuel card upon delivery.
  Drivers MUST provide accurate odometer readings
  at each fill.
• Servicing vehicle.
• Monthly vehicle report.
• FBT Declaration to be completed at the end of
  each FBT year.
• Recalculation for distance variance/and or
  operating costs.

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Monthly Reporting Statements

• review all aspects of the vehicle budgets
  including FBT tracking
• recalculation of their package to address
  variations
• reports emailed monthly directly to novated
  drivers

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Early Termination and End of Lease
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Lease Payment Protection Insurance (Optional)
Involuntary Early Termination

• One off premium payment amortised into the lease,
  shown separately on the lease quote (currently
  650)
• Claimable if employee has suffered
• Involuntary redundancy
• Permanent disability due to injury
• Death

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Lease Payment Protection Insurance (Optional)
Involuntary Early Termination

• The following monthly payment is to be made by
  the employee, and then the following three
  monthly lease payments can be claimed
• The vehicle can be renovated to another employer
  or returned
• If returned, LeasePlan can make a claim on the
  insurer, if the net sales proceeds are less than
  the lease payout figure
• The maximum claim is 25,000

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Early Termination (Options) - Voluntary

• The novation agreement immediately expires, if or
  when, employee
• terminates employment
• There are 3 options available
• Payout the vehicle as at the end date of
  employment
• Continue the lease by paying lease payments
  directly to LeasePlan
• Enter into a new novation arrangement with new
  employer
• Please note conditions and processes apply

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Options at Lease End

• LeasePlan will advise you approx 3 months prior
  to
• end date of options
• Extend lease for further period
• Offer to purchase at residual value plus GST
• Utilise LeasePlan for new novated lease vehicle
• Operating costs will be reconciled as soon as
  practicable (approx 7 days). This reconciliation
  will occur as an adjustment through payroll via
  SaryPlan

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• The University of Newcastle

• 1000157071

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Online Information for Employees

• LP Website www.leaseplan.com.au
• Drivers Online
• Supplier Finder
• - nearest LeasePlan preferred dealer
  location
• - nearest fuel outlet location
• Showroomgt for new models
• Car news reviewsgt linked to Go Auto with tests
  information on all makes and models
• http//www.newcastle.edu.au/service/salary-packagi
  ng/

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LeasePlan Contact Details

• LeasePlan National Novation CentrePh 1300 668
  572
• cservice_at_leaseplan.com.au
• www.leaseplan.com.au
• The University of Newcastle Customer Number -
  1000157071

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Thank you for your attention

• Any Questions