Car Lease for ABN Holder

[mushi mushi 88]

Hello All,

I am writing this in the Aus Social as it is different in other countries so sorry for the annoyance.

I am curious as to get a Novated Car Lease as I hold an ABN, in saying this the income I make through my ABN is not the majority of my income as I work full-time as well as a Marketing Coordinator. I work casually as a kitesurfing instructor and the money I make through that I put through my ABN as it's more convenient tax wise.

I am needing a new car because I currently have a wagon but I get water and sand all through it and consequently it smells like wet towel for a week if not longer, so I am thinking about getting a Toyota Hilux 2x4 so I can throw all my gear in the back tray. I probably turn over apx $3,500p/a from kitesurfing and a lot more from my marketing career so are there any accountants out their who might be able to help me out with this question at all?

Many thanks in advance,

Mushi.

 

[eggman]

We run novated leases for key employees in my company.

You haven't given enough info for me to tell you if you can get a novated. So I'll just explain how it works. Under a novated agreement your employer must sign a declaration with the bank or lease company confirming that they will support lease payments on the vehicle as long as you remain employed by them, when you cease employment with that company then the lease rentals are novated to you and you become responsible for paying those rentals.

If that isn't your situation then you won't qualify for a novated lease agreement.

Given you have an ABN then you can still qualify for a regular lease. One small problem maybe your annual turnover, it doesn't seem high enough for you to be registered for GST. If you aren't registered for GST or GST ITC then the lease will be useless to you, your business won't qualify for the tax benefits.

I'd recommend Chattel Mortgage but without being registered for GST, the benefit will be lost on you.

Given your not GST registered and you can't qualify for an employer novation or a car allowance then I say just go for a simple Hire Purchase. You can use the interest expense and the vehicles depreciation to reduce your taxable income.

FYI - this is just info and NOT tax/financial advice

 

[mushi mushi 88]

Thanks for the info eggman.

I think I'm going to hold off until next financial year and just speak to my accountant when I am lodging my tax return.

Thanks again.