Government CarPlan (GCP) Scheme
Vehicle Salary Packaging for the Senior Management Group
New Leases
A Government CarPlan vehicle lease is an arrangement between you, the University of Tasmania (your employer) and LeasePlan. Under the Government CarPlan a standard Operating Lease in entered into. In return for you committing to reimburse the University for all costs associated with the lease, the vehicle is yours to use as your own. To be eligible for a Government CarPlan vehicle the vehicle needs to be available for business usage please refer Business Usage section. In order for you to access the government discounts the vehicle will be registered in the name of the University of Tasmania, you will have the option among others to purchase the vehicle at the end of the lease.
In addition to the leasing charges, an agreed purchase price (residual value plus GST) is set at the time of entering the Agreement. Employees should fully understand the End of Lease Options prior to entering into any lease arrangements.
There are many things to consider when deciding whether a 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 lease are:
- Fringe Benefits Tax
The provision of a vehicle through Government CarPlan 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 Government CarPlan 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. Please consider this option carefully. If you do not buy the vehicle at the end of the leasing arrangement you will lose your personal contribution.
- End of Lease Options
The Government CarPlan Scheme has a few options available at the end of lease. 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 Government CarPlan User Guide which is available within the Lease Information Kit (GCP).
Note: Employees must not sign anything nor verbally commit to the purchase of a vehicle with the vehicle dealer. If the Government CarPlan lease is accepted, LeasePlan will make the commitment to the vehicle.
The purchase/lease of new vehicles is the only focus of LeasePlan’s Government CarPlan Leasing Product. LeasePlan Online website enables employees to obtain quotes on leasing new vehicles and get a basic understanding of the costs associated with Government CarPlan 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.
For new user registration details see LeasePlan Online.
Further information is available from the Government CarPlan User Guide which is available within the Lease Information Kit (GCP).
A checklist is also included to assist you in following the process for a new vehicle lease.
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 GCP User Guide
- Government CarPlan Policy
- Government CarPlan Procedures
- GCP Salary Packaging Agreement
- Check List for New Vehicles
- Salary Sacrifice /Employment Flexibility Options Calculator
- LeasePlan flowchart for quote process
- LeasePlan Eligible Vehicle List
- UTAS Business TravelAllowance Form
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 and saved for future reference and comparison.
To obtain a quotation you will need to register as a New User on LeasePlan Online. Employee’s will need to quote the UTAS GCP Customer Number 1000037830 and their UTAS email address. Access to the GCP 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 appropriate check list in the Lease Information Kit (GCP).
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.
The LeasePlan insurance application process on LeasePlan Online is standard. Although the vehicles are registered in the UTAS’ name the insurance is based on the individual and the premiums are established on that basis. It is therefore a requirement for LeasePlan to collect an accident history on the driver. SMG members will have to answer further questions about any accidents that have occurred in the last three years as well as any driving convictions. SMG members will receive a copy of the LeasePlan insurance policy at the commencement of the lease and again each year upon renewal.
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.
Making a Personal Contribution will reduce the FBT Base Value of the vehicle and therefore reduce your FBT liability.
Making a Personal Contribution towards a Government CarPlan lease needs to be fully understood because if the employee hands back the vehicle either during the lease or at the end of the lease they forfeit their Personal Contribution.
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 lease part way through the year your yearly kilometers are calculated on a pro-rata basis (ie: yearly km divided by 365(366 leap year), days multiplied by the number of days vehicle will be held until 31st March).
A Government CarPlan 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 Government CarPlan User Guide which is available within the Lease Information Kit (GCP).
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 Government CarPlan User Guide within the Lease Information Kit (GCP).
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 a requirement that an employee’s Government CarPlan vehicle be used for business purposes. The vehicle must comply with UTAS' Driving Authorised Vehicles Policy http://www.admin.utas.edu.au/hr/ohs/pol_proc/driving.pdf 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.
Please also be aware that you will need to consider how you want to be reimbursed for your Business Travel Expenses. There are two options:
- Where your business usage is expected to be substantial, you can make arrangements by completing a SMG Business Travel Allowance Form, included in the Lease Information Kit GCP). Please note this payment is a taxable payment along with your normal salary.
- Where your busines usage is lower, you may choose to claim for each trip individually on a Claim for Kilometreage Allowance form http://www.admin.utas.edu.au/hr/forms/pmv.pdf
This reimbursement is not taxed by the payroll system due to most staff being able to claim back expenses in relation to the vehicle in their tax return. This is not the case for leased vehicles therefore tax will be calculated on this reimbursement and paid at tax return time. This could be a significant amount and you may wish to increase you PAYG tax by a fixed amount each fortnight to allow for this.
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.
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 under Corporate Customers / Standard Forms.
On hand back, 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 quotation). 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 if handback is mid lease term. 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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