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If you are running a business and have travelled in Australia or overseas on the business trip then you can claim the deduction for the expenses you have incurred.
However, if you are looking to start a business and travelled on the research purposes then you would not be able to claim a business deduction.
If you are staying away from your resident place of business for six or more consecutive nights then you must use a diary to record the particulars of each business activity.
The particulars would include
• The nature of the activity
• Day and approximate time of the business activity began
• How long the activity lasted
• The name of the place where you were engaged in the business activity.
You must exclude your business and private expenses on your business trip.
Employers are required to keep records of the value of any fridge benefits given to employee and associates, but only need to show these benefits on the employee’s payment summary if their taxable value exceeds $2,000 in an FBT year (1 April to 31 March).
Benefits provided to any of the taxpayer’s associates (for example, spouse or children) in respect of their employment will be included as fridge benefits provided to them. Prior to 1 April 2007 this threshold amount was $1,000.
The employer grosses up the value of benefits provided using the FBT rate equal to the highest marginal rate of income tax plus Medicare levy (currently 46.5%). Therefore, a fringe benefit with a taxable value of $2,001 becomes a reportable Fridge Benefit amount of $3,740.
What is a Novated Lease?
Novated leasing might sound complicated but in fact it's not that hard to comprehend. And once you recognize how it works you'll see that it is a great way to save lots of money. Novated leasing is like making your car, new or existing, a company car. That means you get the tax benefits of a company car, and if you're buying new you're also open to GST savings on the initial purchase price of the car.
It all starts as a three-party agreement between you, your employer and a finance company that leases you the car. From there you select the car that you want, it could be your current car or a brand new one (most of the time it's a new car). The finance company then purchases the car on your behalf and you pay the finance company back with a pre-agreed amount each month or fortnight. This usually lasts for up to five years.
What are the benefits of a Novated Lease?
The benefits start here. Each monthly payment is drawn directly from your salary, before tax, which lowers your income tax and in the end provides you with a greater pay packet. Moreover, all of the car's running costs, including registration, insurance, servicing, and even fuel can be rolled into the pre-tax payment. This is a fully maintained novated lease. This virtually means you're paying no tax on fuel, servicing or other running costs. Well, no tax that affects you anyway.
In the event employment is terminated during the lease period the lease then becomes the car owner's responsibility, including payments and GST. However, if you're simply swapping from one job to another there is the possibility of rolling your lease program over to your next employer to continue on.
When it comes to the end of the lease agreement, usually a maximum of five years, the owner usually has the opportunity to buy the vehicle outright at its residual value. You can also re-finance the vehicle or sell it. If you end up selling it for a profit you can keep the money tax free.
It seems like a win-win situation for all parties. The employer is happy since it doesn't have to worry about job termination and being left with the lease, and the employee is happy as he or she gets to drive around in a nice new car - if they choose - and not have to worry about paying annual costs. The employee can also capitalise on making payments before tax, as opposed to paying off a loan which comes out of a salary after tax.
There are a number of finance companies that specialise in novated leasing in Australia and can provide a plan that's best suited to you and your employer.
Feel free to Tax Accountants Cranbourneon 1300 300 106 if you have any further questions.
This article was research and written by Editor in Chief Brett Davis from NovatedLeasing.com.au. Brett is a passionate Journalist from Australia and contributes to many websites such as, PerformanceDrive.com.au, CarLoans.com.au and TopGear.com.
Business tax obligations is an enormous and complicated area of accounting. Without the guidance of skilled accountants a business can be at a risk of valuable cash flow on account of having to pay an excessive amount of income tax, or possibly losing more cash in penalties and fines if your tax is not paid correctly and on time.
Regardless if you are a partnership, sole trader, company or trust, we give you our full attention. No client is too small for us. We look at the business structure to check its set up correctly to take advantage of income tax laws and capital gains tax to the fullest extent.
We will maintain the statutory register, such as preparation of the necessary minutes of the meetings, resolutions and other regulatory requirements to ensure you remain compliant.
For Individuals our responsibility is to ensure that you obtain the best possible income tax outcome, claim all the tax deductions and offsets you are entitled. In addition we recommend methods for you to help you save income tax in the long term.
At BookSmart Accountants, our accounting & taxation professionals are experts in helping individuals, medium and small size businesses with their tax requirements, in addition to offering a range of other products and services which will make your life easy. From business structuring, income tax return preparation and lodgement, bookkeeping, BAS and financial statement preparation, BookSmart Accountants offers a complete business accounting service.
We are Lynbrook Tax Agents and Lynbrook Accountants and offer a range of taxation and accounting services to businesses and individuals at affordable prices and are certified public accountants.