GST and Novated Leasing
We cover everything you need to know about GST and novated leasing. From running costs to residuals.
We cover everything you need to know about GST and novated leasing. From running costs to residuals.
One of the big questions when getting a novated lease is, how does it impact GST. This is one of the greatest savings involved when buying a car with a novated lease.
If you buy a car from a GST paying entity (like every car dealer ever) you do not pay the GST! (wooohooo!) There is a GST savings threshold which is currently set at $5,234.64. You would be correct in saying that is indeed a bucket load of cash.
If you buy a car from a non-gst registered entity like a regular private seller, there is no GST payable so no GST to save.
You couldn’t possibly save more GST could you? Well yes, yes you can! With a novated lease you don’t pay GST on the running costs of your vehicle either. That means when you are filling up the tank, paying for your servicing or insurance or even getting it cleaned you could be eligible to claim all of the GST back on those transactions as well!
Generally, you just need to keep the receipt, submit it to your novated leasing provider and they will be able to do the rest of the work. The GST is itemised on the receipt, the novated provider will report to your employer, your employer claims them with the ATO and you get them as ITCs or input tax credits.
If you already have a lease, speak to your employer and novated provider on how they treat ITC’s or if you are looking at a lease, make sure you discuss it up front with them.
When you first take out your Novated Lease, the residual or balloon value will not have GST applied to it. However, if you go to pay it out, the amount owing will be the residual value that is left at the end of the term plus GST. It is that simple.
If you are stuck on anything tax related, this is general info and it is best to talk to your accountant.
If you have any questions about GST on novated leases or residuals, fill out one of our many forms and we can have one of our novated leasing partners reach out to answer anything at all.
Find out exactly what a novated can do for you! Request a quote today, speak to a leasing expert and they will prepare a free quote so you can see the numbers in black and white.