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Important changes to FBT

Treasurer Wayne Swan announced an important change to the Statutory Formula calculations for FBT on motor vehicles.

Wayne advised “The Government will reform the current ‘Statutory Formula’ method for determining the taxable value of car fringe benefits by replacing the current statutory rates with a single rate of 20 per cent that applies regardless of the distance travelled.”

“This reform will apply to new contracts entered into after 7.30pm (AEST) on 10 May 2011, and will be phased in over four years. There are no changes to Novated leases entered into prior to 7.30pm (AEST) 10 May 2011.

Listed below is the breakdown of the table which breaks down the new Formula’s:

Distance travelled during the FBT year
(multiplied by the cost of the car to determine a person’s car fringe benefit)
(1 April – 31 March) Statutory rate 

PRE ANNOUNCEMENT FROM 10 MAY 2011 FROM 1 APRIL 2012 FROM 1 APRIL 2013 FROM 1 APRIL 2014
Less than 15,000 km 26% 20% 20% 20% 20%
15,000 to 24,999 km 20% 20% 20% 20% 20%
25,000 to 40,000 km 11% 14% 17% 20% 20%
Over 40,000 km 7% 10% 13% 17% 20%

Summit Fleet is in the process of making the necessary adjustments to our quoting system in preparation of the Royal Assent (for this to officially become law). Until this becomes law, Summit Fleet will provide you with 2 FBT figures. The first being calculated on the current FBT percentages and the second on the proposed change. Please be mindful to take these figures into account when speaking with your financial advisor prior to entering into a Novated lease.

If you have a further questions please contact your Summit Fleet Sales and Client Services Consultant or email to enquiries@summitlease.com.au.