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Car Allowance? (Read 8638 times)
IQSRLOW
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Car Allowance?
May 23rd, 2007 at 9:39pm
 
Anyone know how to most effectively package a car allowance?

If you don't use all of your entitlements, how does the tax man cometh?
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Sprintcyclist
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Re: Car Allowance?
Reply #1 - May 23rd, 2007 at 10:06pm
 
Hi IQSRLOW

Sorry I know nothing about that.
Often when I have a tax query I ring the Aussie tax Office and ask them.
They are very good, very helpful and are happy that a customer ask them first.
You are not wanting to cheat them, just to be informed. That is to everyones best interests,

They have never asked my name, though I give it anyway.
They make the rules, so know them pretty well.  Smiley

And it's free.
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freediver
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Re: Car Allowance?
Reply #2 - May 24th, 2007 at 9:33am
 
Your accountant at work may be able to help also. I don't think there's much benefit in this sort of thing any more. Also, make sure you seriously consider the benefits of taking the money instead. Most people who do this end up with an expensive car that they wouldn't normally fork out for themselves.
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IQSRLOW
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Re: Car Allowance?
Reply #3 - May 24th, 2007 at 9:58am
 
Thats what I am trying to work out.

The car allowance is paid directly to me, tax free I presume. I buy whatever I like and account for all expenses.

My point being do I buy a fiat bambino and pocket the balance or get that BMW I have always wanted. I believe there are a few tax implications.
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oceans_blue
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Re: Car Allowance?
Reply #4 - May 24th, 2007 at 12:32pm
 
IQSRLOW wrote on May 24th, 2007 at 9:58am:
Thats what I am trying to work out.

The car allowance is paid directly to me, tax free I presume. I buy whatever I like and account for all expenses.

My point being do I buy a fiat bambino and pocket the balance or get that BMW I have always wanted. I believe there are a few tax implications.



Would it be legal to' pocket the balance I,m wondering?'
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Sprintcyclist
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Re: Car Allowance?
Reply #5 - May 24th, 2007 at 1:15pm
 
Yes, entirely legal to pocket the balance.

A car allowance is given to cover the cost of running a car. If the actual cost is less, good for you. If acttual cost is more, bad luck .
Generally those allowances may seem generous. However they are very well calculated, there will be little if any left over after ALL the costs.
My preference would be to take the company car, sell my own.  As long as I can use theirs legitimately for personal use.
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oceans_blue
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Re: Car Allowance?
Reply #6 - May 24th, 2007 at 2:41pm
 
Sprintcyclist wrote on May 24th, 2007 at 1:15pm:
Yes, entirely legal to pocket the balance.

A car allowance is given to cover the cost of running a car. If the actual cost is less, good for you. If acttual cost is more, bad luck .
Generally those allowances may seem generous. However they are very well calculated, there will be little if any left over after ALL the costs.
My preference would be to take the company car, sell my own.  As long as I can use theirs legitimately for personal use.


Thanks for that Sprint.
Wink
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IQSRLOW
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Re: Car Allowance?
Reply #7 - May 24th, 2007 at 3:29pm
 
The car allowance is in lieu of a company car.

It may be that the tax man will take nearly half of anything left over...might be time to visit an accountant  Undecided
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Sprintcyclist
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Re: Car Allowance?
Reply #8 - May 24th, 2007 at 3:38pm
 
good idea to se an expert. 
rang the australian Tax office yet ? They are pretty knowlagable about such matters.
Apparently they even have inside information !   Smiley

Course, it's free and convenient. Right on the phone, or net I guess.
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freediver
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Re: Car Allowance?
Reply #9 - May 24th, 2007 at 4:07pm
 
I think it is counted as income either way and you get taxed on it, so you might as well just take the money.

Laptop computers are a different issue. You get a good tax rebate on them. If you are on the top bracket the government gives you back more money than what you paid for the laptop.
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IQSRLOW
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Re: Car Allowance?
Reply #10 - May 24th, 2007 at 5:00pm
 
Sprintcyclist wrote on May 24th, 2007 at 3:38pm:
good idea to se an expert. 
rang the australian Tax office yet ? They are pretty knowlagable about such matters.
Apparently they even have inside information !   Smiley

Course, it's free and convenient. Right on the phone, or net I guess.


They were about as helpful as a one armed man in a rowing competition.
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freediver
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Re: Car Allowance?
Reply #11 - May 24th, 2007 at 5:07pm
 
Rather than asking them what you should do, you need to ask them what the law is, then figure out what you should do based on that. They aren't going to give 'personal advice' because that requires them to know your situation in some detail. Try asking them under what conditions you can avoid having to register goods as income.
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IQSRLOW
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Re: Car Allowance?
Reply #12 - May 24th, 2007 at 5:18pm
 
I wasn't asking them what I should do. I was asking them how it is taxed, but the young guy on the phone had no idea unless it was salary sacrificed, which technically it isn't.

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