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Embracing Electric Vehicles, Novated Leases and Tax Benefits

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Disclaimer: The information provided in this article is of a general nature only and does not take into account your personal needs, objectives, or financial circumstances. Always seek professional advice before making any financial decisions.

In the ever-evolving landscape of finance, Reventon Finance stands at the forefront, guiding our clients towards innovative solutions that cater to modern needs. One such avenue that’s gaining traction is the integration of electric vehicles (EVs) into novated lease agreements. But what does this mean for you, and how can it benefit your financial journey and more importantly, save you tax?

Understanding Novated Leases and FBT

A novated lease is a tri-party agreement involving an employee, employer, and a finance company. It allows employees to lease a vehicle using their pre-tax salary, potentially leading to tax benefits. However, with these benefits come certain tax implications, notably the Fringe Benefits Tax (FBT).

FBT applies to benefits received by an employee from their employer that aren’t part of their wage. For instance, if your employer provides you with a car for personal use, that’s a fringe benefit. The FBT rate is currently set at 47%, which might seem steep. But here’s where the novated lease magic happens: through the Employee Contribution Method (ECM), employees can make post-tax contributions towards their vehicle’s running costs, effectively reducing the FBT liability, sometimes even to zero.

The Electric Vehicle Revolution

The Australian government, recognizing the environmental and economic benefits of EVs, introduced an FBT exemption for eligible electric and plug-in hybrid vehicles from 1 July 2022. This exemption, which covers vehicles valued below the luxury car tax threshold (currently $89,332 for FY 2023/24), also extends to related running costs like charging, registration, and insurance.

This move is not just about sustainability; it’s a financial game-changer. With potential savings in the thousands of dollars annually, the EV novated lease pathway is becoming an attractive option for many Australians.

Why Choose Reventon Finance for Asset Financing?

  1. Expertise: Our team is well-versed with the intricacies of novated leases and the latest in EV incentives. We guide you through the process, ensuring you maximize benefits while staying compliant.

  2. Tailored Solutions: We understand that every individual’s financial situation is unique. Our asset finance solutions are customized to align with your goals and circumstances.

  3. Holistic Approach: Beyond just offering finance solutions, we look at the bigger picture. From GST considerations to potential balloon payments, we ensure you’re informed every step of the way.

Benefits of Novated Leasing with Reventon Finance

  • Tax Savings: Salary sacrificing through a novated lease can reduce your taxable income. Plus, with the FBT exemptions for EVs, the savings potential is significant.

  • GST Advantages: Acquire a vehicle through a novated lease and you could save on GST, up to a maximum of $6,191.

  • Flexibility: From choosing your desired vehicle to deciding on post-tax contributions, a novated lease offers flexibility tailored to your needs.

  • Hassle-Free: We handle the complexities, from liaising with your employer to ensuring all paperwork is in order. Your journey to acquiring a new vehicle is smooth and straightforward.

Conclusion

The world of finance is dynamic, and at Reventon Finance, we’re always a step ahead, ensuring our clients have access to the best in the industry. With the rise of electric vehicles and the financial incentives they bring, now is the perfect time to consider a novated lease. Whether you’re an employee seeking tax benefits or an employer aiming to offer attractive packages, our asset finance service is designed to cater to your needs.

Embrace the future. Drive green, save smart. Reach out to Reventon Finance today.

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