Novated Lease

A Novated Lease is a 3 way agreement between the employer, employee and the finance company. Under a Novated Lease arrangement the employer agrees to take on the responsibility of paying the employees monthly payments from the employee’s pre-tax income.

Employee Benefits:

Choice – When you Novate unlike receiving a company car, you can choose what vehicle you would like to buy/drive.
Pay Less Tax – A large portion of your car expenses is paid with your pre-tax income therefore substantially reducing your taxable income.
Save on GST – You don’t pay GST on the purchase price of the vehicle & also save GST on the running cost of the vehicle.
Fleet Discounts – Receive fleet discounts on the vehicle you purchase
End of Lease tax Profit – If you sell or trade in your vehicle for a profit, the profit is tax free, no capital gains tax is payable.

Employer Benefits:

Salary Value – An employer can increase an employee’s salary without it costing a thing to them.
GST Savings – An employer can claim a substantial portion of the Novated Leases GST on behalf on the employee.
Attract Quality Staff – Recruit quality staff by offering attractive vehicle salary packaging options.
Reduce Vehicle Responsibility – Under a Novated Lease arrangement the responsibility of the vehicle rests with the employee unlike if the employer provided company cars.

A Novated Lease has substantial benefits for an employee and an employer. Novating your next vehicle, if possible, is by far the most tax-effective solution.

Speak with a consultant from A1 to discuss your options today.