Corporate CarPlan (CCP) Scheme
Vehicle Salary Packaging for Academic and General Staff
New Leases
A novated vehicle lease is an arrangement between you, the University of Tasmania (your employer) and LeasePlan.
Under the Novation Agreement, the obligation for the payment of the leasing charges is transferred (novated) from you to your employer
for the term of the agreement. However, you retain ultimate responsibility to make any payments under the lease. The payment of these leasing
charges is paid either all pre-tax or a mixture of pre-tax and post-tax based on information received.
In addition to the leasing charges, an agreed purchase price (residual value plus GST) is set at the time of entering the Novation Agreement.
Employees should fully understand the End of Lease Options prior to entering into any novated lease arrangements.
There are many things to consider when deciding whether a novated vehicle lease is for you and the University recommends that financial advice
is sought prior to making a decision to proceed. Some things to consider in relation to a novated lease are:
- Fringe Benefits Tax
The provision of a vehicle through novated vehicle leasing incurs Fringe Benefits Tax (FBT). More information on FBT is available below.
- Employee Contribution Method
Employees may elect to make an after-tax payment towards their vehicle lease (called the Employee Contribution Method - ECM).
This payment has the effect of reducing the FBT liability that would otherwise be payable on the novated lease. More information on ECM is available below.
- Personal Contributions
Employees may elect to pay an amount towards the initial purchase of the vehicle. These payments reduce the taxable value of the vehicle for FBT purposes
and reduce the leasing costs.
- End of Lease Options
The Corporate CarPlan Scheme has few options available at the end of lease but the most common option requires the vehicle to be purchased at
residual value plus GST on expiry of the lease term. The purchase can be delayed by re-leasing the vehicle for another period if appropriate.
End of Lease options are outlined here.
The staff member retains ultimate responsibility to make any payments under the lease in the event that they leave their employer or if their employer fails to make
payments on their behalf or their personal circumstances change. (ie leave without pay, study leave, overseas travel). Further information is available
from the Corporate CarPlan User Guide which is available within the Novated Lease Information Kit (CCP).
Note: Employees must not sign anything nor verbally commit to the purchase of a vehicle with the vehicle dealer.
If the novated lease is accepted, LeasePlan will make the commitment to the vehicle.
LeasePlan Online access enables employees to obtain quotes on leasing vehicles and get a basic understanding of
the costs associated with Novated Leasing. Using LeasePlan Online, you can
simulate different leasing affordability scenarios including making Personal Contributions, opting for the Employee Contribution Method and modeling different
kilometres to see what effect they have on the FBT and operating costs.
Ultimately the information the employee provides for their final quote should be as accurate as possible. LeasePlan will allow the finance and novation of second hand vehicles. The vehicle must satisfy LeasePlan's criteria which includes vehicle age and kilometres at both start and finish of lease. Leaseplan will only finance the vehicle at its assesssed market value and they may require you to make a Personal Contribution if they consider the vehicle to be overpriced. LeasePlan will require confirmation of information submitted online to enable them to provide a quote on used vehicles. LeasePlan do charge a fee for processing a used vehicle lease please refer to the Corporate CarPlan Userguide found in the lease infomation kit below.
For new user registration details see LeasePlan Online.
Further information is available from the Corporate CarPlan User Guide which is available within the Novated Lease Information Kit (CCP).
A checklist is also included to assist you in following the process for a new vehicle lease.
If you have an existing novated lease and would like LeasePlan to take over the arrangement please contact LeasePlan Australia. It is entirely at LeasePlan’s discretion whether they provide a quotation for
your consideration or not. The Corporate CarPlan User Guide will give you information on how a LeasePlan lease operates.
If accepted, LeasePlan will provide documents for you to consider the lease will be issued on a fully maintained basis.
Further information is available from the Corporate CarPlan User Guide which is available within the Novated Lease Information Kit (CCP).
Please click on the following link to download the New Lease Information Kit to your desktop - Download here This kit is in Winzip format which can be unpacked on your desktop.
Included in the kit is:
- LeasePlan CCP User Guide
- Corporate CarPlan Policy
- Corporate CarPlan Procedures
- CCP Salary Packaging Agreement
- Check List for Vehicles
- Salary Sacrifice /Employment Flexibility Options Calculator
- LeasePlan flowchart for quote process
LeasePlan Online is a tool developed by LeasePlan to enable you to obtain quotes on vehicles.
Quotes can be obtained with no obligation to proceed with the lease. Quotes can be saved for future reference using the Save option.
To obtain a quotation you will need to register as a New User on LeasePlan Online. Employee’s will need to quote the UTAS CCP Customer Number 1000037833 and their UTAS email address. Access to the CCP LeasePlan Online requires manual approval by the Vehicle Salary Packaging area. Once access has been approved, an automated email response will be sent to the Employee’s UTAS email account with a temporary password for LeasePlan Online.
This password will need be to be changed when first logging into the system. To register, click here.
If staff experience issues in accessing or using LeasePlan Online, please contact LeasePlan directly.
For details on how to proceed once you have an acceptable quote please refer to the check list in the Novated Lease Information Kit (CCP).
The detailed lease quote from LeasePlan will outline the various components of the quote such as lease charges and estimates for running costs and an agreed residual value.
Once a quotation is received from LeasePlan you have enough detail to seek financial advice. As with all salary packaging/sacrifice arrangements, staff are strongly encouraged to seek independent financial and taxation advice before entering
into any salary package arrangement such as a novated vehicle lease, to ensure it suits an individual's personal and financial circumstances. UTAS will not offer any financial or taxation advice about the suitability, benefits or risks of salary packaging.
To assist with understanding the effect on your Net Pay we have included in the New Lease Information Kit a Salary Sacrifice / Employment Flexibility Options Calculator. This tool will enable you to compare your current pay situation to one that includes salary sacrificing for a motor vehicle. In no way should the results of this calculator be taken as the University offering financial advice.
The information needed from the LeasePlan quote are,
- Vehicle Cost excluding GST,
- Yearly kilometre estimate,
- FBT Base Value and
- Optionally you can elect to use the ECM approach by ticking the box.
If you have any queries using the Salary Sacrifice / Employment Flexibility Options Calculator please contact either Kylie Burke, Vehicle Salary Packaging Officer (Phone Ext. 3415 or E-Mail kylie.burke@utas.edu.au ) or Stephen Mace, Manager Payroll Services (Phone Ext. 3053 or E-Mail Stephen.mace@utas.edu.au ).
Comprehensive insurance is part of your fully maintained lease. The University considers insurance as being part of the product and will not sign off quotes where insurance is omitted.
Further information is available from LeasePlan Australia www.leaseplan.com.au .
Employees can elect to make a Personal Contribution towards the vehicle they are leasing up to a maximum of 20% of the value of the vehicle.
LeasePlan needs to be aware that you are going to make this contribution at time of quoting.
This payment is made directly to the seller of the vehicle and the amount financed by LeasePlan will be reduced by this figure.
It is generally a voluntary payment but in the case of a used vehicle, LeasePlan may require you to make a Personal Contribution if the assessed market value is less than the
price of the vehicle.
Making a Personal Contribution will reduce the FBT Base Value of the vehicle and therefore reduce your FBT liability.
Employees need to decide if this is something that they wish to do.
Leases pre 7.30pm 10th May 2011
The factors involved in the calculation of the amount of FBT payable are the value of the vehicle and the total kilometres you will travel on a yearly basis. It is the employee’s responsibility to monitor and manage their FBT liability, especially meeting their kilometres. It is important to note that the FBT year operates from the 1st of April each year through to the 31st March. If you take up a novated lease part way through the year your yearly kilometers are calculated on a pro-rata basis (ie: yearly km divided by 365 days multiplied by the number of days vehicle will be held until 31st March).
A Novated Leasing Arrangement will incur Fringe Benefits Tax (FBT). All employees will cover the cost of the FBT incurred on their novated lease vehicle. The two main factors that you can control with regard to your vehicle and FBT are price of vehicle and the kilometres driven. Reducing the cost of the vehicle will reduce the FBT liability and the more kilometres driven will reduce your Statutory Factor for FBT purposes.
The Statutory Factor varies according to the annual distance travelled:
| Kilometres travelled per annum |
Rate |
| 0 - 14,999 |
26% |
| 15,000 - 24,999 |
20% |
| 25,000 - 40,000 |
11% |
| 40,001 + |
7% |
Lease (New Contracts) post 7.30pm 10th May 2011
Transition Example: a new contract entered into 01.06.11 for 3 years travelling 26000 klm’s per annum, with no changes to the lease during the term.
Statutory rates applicable:
- for the first FBT year ending 31.03.12 14%,
- for the second FBT year ending 31.03.13 17%,
- and 20% thereafter regardless of the kilometres travelled.
Effective post 7.30pm 10th May 2011 the Federal Government introduced new arrangements for the purpose of calculating FBT on motor vehicles. As at the 1st April 2014 all new contracts will be calculated at a flat statutory rate of 20% regardless of the amount of kilometres travelled during the year. There are transitional rates and requirements in place until this date please refer table above.
The factors involved in the calculation of the amount of FBT payable are the value of the vehicle and until 1st April 2014 the total kilometres you will travel on a yearly basis. It is the employee’s responsibility to monitor and manage their FBT liability, especially meeting their kilometres. It is important to note that the FBT year operates from the 1st of April each year through to the 31st March. If you take up a novated lease part way through the year your yearly kilometers are calculated on a pro-rata basis (ie: yearly km divided by 365 days multiplied by the number of days vehicle will be held until 31st March).
A Novated Leasing Arrangement will incur Fringe Benefits Tax (FBT). All employees will cover the cost of the FBT incurred on their novated lease vehicle. After the 1st April 2014 the main factor that you can control with regard to your vehicle and FBT will be the price of the vehicle. Reducing the cost of the vehicle will reduce the FBT liability.
Relevant for all Leases:
Employees may also wish to explore whether the “Employee Contribution Method” would benefit them as it can be used to eliminate their estimated FBT liability by paying a post tax contribution towards the leased vehicle’s operating costs.
Further information is available from the Corporate CarPlan User Guide which is available within the Novated Lease Information Kit (CCP).
An employee can elect to use the Employee Contribution Method to eliminate their estimated FBT liability. In this approach the employee will make an after tax contribution
towards the operating costs of the vehicle. LeasePlan will calculate the post tax contribution needed to completely eliminate your estimated FBT liability as part of the
quoting process. It should be noted that if for any reason the actual level of FBT liability is greater than the estimated FBT liability, the employee will still be required to
pay the amount of FBT liability that has not been eliminated after taking into account the after tax contribution.If the actual level of FBT liability is less than the estimated liability
there will be no adjustment made to maximise the position of the employee (ie:move after tax payments to pre-tax).
This can be a complex concept to understand details on how it works are found in the Corporate CarPlan User Guide within the Novated Lease Information Kit (CCP).
Employees need to consider all of their financial situation when assessing to adopt the ECM approach. As with all salary packaging/sacrifice arrangements, staff are strongly encouraged to seek
independent financial and taxation advice before entering into any salary package arrangement such as a novated vehicle lease, to ensure it suits an individual's personal and financial
circumstances. UTAS will not offer any financial or taxation advice about the suitability, benefits or risks of salary packaging.
Staff who elect to salary package a motor vehicle will be charged a Motor Vehicle Salary Packaging Charge. This charge will be processed via the payroll as a pre-tax transaction.
This charge will be levied as two components:
- An initial $110 charge levied at the commencement of each leasing arrangement (comprising a once-off $100 charge and $10 for the first fortnight), and
- An ongoing amount of $10 per fortnight payable for the remainder of the lease period.
The above charges are in addition to the leasing charges as advised on any LeasePlan quote.
A $600.00 pre-tax “bond like” deduction to the employee’s pay will be made generally prior to the delivery of the vehicle.
This deduction will be held by the Univeristy in the employees reconciliation account and will be used to offset any deficit in costs at the end of your leasing arrangement.
It will be returned to you as part of the final reconciliation of your leasing arrangement if not needed to offset any outstanding debts.
Any monies returned to the employee at the end of the lease will be less PAYG tax. More information on the End of Lease Reconciliation can be found in this section.
There is no requirement that an employee’s novated vehicle be used for work purposes. However, if the vehicle is intended to be used for work purposes, it must comply with UTAS' Driving Authorised Vehicles Policy http://www.human-resources.utas.edu.au and these requirements should be assessed prior to taking up the lease. Please also be aware that new safety features are being developed all the time and that at any time in the future, the existing requirements may change. Along with the existing requirements, features to look out for include Electronic Stability Control (ESC) or equivalent, Airbags – front, side, curtain & knee, 5 star ANCAP rating.
Prior to leasing a vehicle the employee should discuss any intended business usage with their Budget Centre Head. The Budget centre is in no way obliged to agree to any business usage. When a novated vehicle is approved for business use, reimbursement for costs can be cliamed using a "Claim For Kilometreage Allowance" form. This form and other information (Vehicles - Driving Authorised Vehicles Policy) can be obtained from UTAS Human Resourses web site see link above.
In the event of an accident while the vehicle is being used for approved business purposes, any reasonable insurance excess levied may on request be reimbursed by the relevant University Budget Centre. Claims are limited up to a maximum of two in any 12 month period.
Note: Kilometreage allowance payments for business usage are not taxed when they are paid as the employee would normally be able to claim a tax deduction for costs associated with using the vehicle but this is not the case for a novated lease vehicle. Employees using their novated vehicle under such arrangements should assess whether they need to make voluntary tax contributions to offset any tax payable via their Tax Return.
Unfair wear and tear / excess kilometres may be an area of concern if you need to use the hand back / early return guarantee.
LeasePlan have a Fair Wear & Tear Guide available at www.leaseplan.com.au search for Standard Forms.
If an employee chooses to use the hand back / early return option on termination of their employment, LeasePlan will assess the vehicle for Unfair Wear and Tear and apply any extra charge for excess kilometres
(excess kilometres rate can be found on your original pre-calculation paperwork). Please note under the hand back option any deficit in “Other Provisions” is due to be paid and all
other deficits / surpluses in your operating budgets are forfeited. Any items attached to the vehicle initially, such as log books, fuel cards, both sets of keys etc. must be returned
on the day of the hand back.
Note: Employees should discuss the implications of using the hand back option with LeasePlan so they understand the full impact of any possible decision.
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