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Novated Lease Information

A Novated Lease is a flexible, portable method to finance a motor vehicle as part of an employee’s salary package. It may be a more cost effective alternative for employer and employee and can provide great tax advantages to the employee’s remuneration package.

Novated Lease For Employees

A Novated Lease is the most tax-effective and cheapest finance method for owning and running a car. It may provide you with thousands of dollars in tax savings each year and is the smart approach to owning a car

Novated Lease for Employers

A Novated Lease is like giving your staff a pay-rise that you don’t have to pay for. It reduces your companies’ worker’s compensation, payroll tax, superannuation and adds money to your bottom line of your business. A Novated Lease is the smart approach to packaging a car.

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Novated Lease for Employees

What is a Novated Lease?

A Novated Lease is a highly tax effective form of vehicle financing. It involves a novation agreement between an employee (you), your employer and a financier. This agreement allows a substantial proportion of the car finance and the costs associated with owning a car to be deducted from your pre-tax income. As a direct result, you will gain substantial tax-benefits and achieve greater disposable income.

What can be included in a Novated Lease?

A Novated Lease is the cheapest most tax efficient way of owning a car. Brokers ink finance can roll all the other costs of running a car into the payments too, so you’re not only saving money on the actual finance, you can save money on servicing, petrol, tyres, insurance, basically any expense to run your car.

Who qualifies for a Novated Lease?

If you are employed, you qualify.
The only people where a novation agreement is not possible, is if you’re self-employed, or a temporary contractor. In these cases you may want to consider our other car financing options such as a Commercial Hire Purchase, Chattel Mortgage, or a Car Lease.
Brokers ink finance can also do you a Novated Lease if you already own a car outright and save money and also free up the equity in your car.

Novated Lease Benefits

Income Tax Savings – each pay period a substantial portion of the car expenses are taken from your pre-tax income, reducing your taxable income and the amount of income tax you need to pay.
GST Savings – Your employer and the financier claims back significant portions of the GST on your behalf.
Fixed Costs – The Novated Lease, lease payments are fixed for the duration of the lease and allow you to avoiding those nasty large annualised car costs. By fixing your car costs the Novated Lease helps you budget your money.
End of Lease Tax Free Profit – If, at the end of the lease you sell or trade in your vehicle for a profit, this profit is tax free. It is not subject to Capital Gains Tax (CGT).
Convenience – The registration, CTP and Comprehensive Insurance is renewed for you automatically. Your Fuel card is accepted at every fuel outlet in Australia.

How do I get a Novated Lease started?

If you haven’t already spoken with Brokers ink finance: Free Call 1300 003 462 to speak with one of our highly trained Novated Lease consultants. They will discuss your situation in detail and structure a Novated Lease estimate specific to your circumstances.
If your employer doesn’t have an existing relationship with Brokers ink finance you will need to approach the applicable person. With their permission a Novated Lease manager will liaise with them in order for you to access the Novated Lease.
If you have decided on the new car, we will source the vehicle for you at the best price. Our bulk buying power accesses fleet discounts not available to the public, saving you time and money.

Once the vehicle has been sourced your Novated Lease consultant will liaise between you and the financier to arrange financial approval.

Brokers ink finance arranges payment and delivery. You are now in your Novated Lease car!

What Next?

To find out more about how to make a Novated Lease work for you, please give us a call on1300 003 462
We’ll answer all of your questions and explain the entire Novated Lease process or
Book a free consultation

Novated Lease For Employers

How do employers benefit from offering a Novated Lease?
Add Salary Value – By allowing Novated Leasing, you are giving your staff access to using their pre-tax salary. This reduces their taxable income and saves them money and in some cases, the savings can be thousands of dollars. So its like giving your employees a pay rise that you don’t have to pay for!
Attractive Staff Incentive – By offering a Novated Lease as a part of an Employee’s package, Employers are better able to attract and retain the best staff.
Reductions In Taxable Income Related Expenses – By allowing a Novated Lease, you can potentially reduce the company’s payroll tax and work cover premiums.
Reduce Vehicle Responsibility – Unlike a company car, the responsibility of the Novated Lease stays with the employee even in the event they leave your employment.
Its free – A Novated Lease shouldn’t cost you anything if set up correctly.

How does the Novated Lease work?

In order for a Novated Lease to be set up, two agreements need to be put in place. The first is a finance lease between the employee and financier taken out in the Employee’s name. This is the car loan component of the VIP lease. The second is a novation agreement which is entered into by the financier, employee and employer to initiate the lease. This enables the Novated Lease costs to be invoiced to the employer and deducted tax effectively from the employee’s salary.
The Novated Lease costs are worked out over the duration of the lease and divided into equal monthly payments. These payments are recovered by the employer from the employee’s salary and a portion of the GST from the ATO.
Brokers ink finance take care of all the associated paperwork and provide a detailed Payroll Advice detailing the payroll deductions specific to each lease.

What happens if the employee leaves?

Your employee’s Novated Lease is fully portable, so if they leave, the Novated Lease leaves with them. Ensure that their final pay is held until the running cost budget reconciliation is received, as there may be a deficit to recover from their final pay.
What happens if the employee is overspending on the running budgets?
If a significant variance is forming in the budgeted running costs the employee will be asked to recalculate their lease to modify the deficiency.

Why use Brokers ink finance?

The Brokers ink finance will finance over 50 million dollars’ worth of equipment and car finance this year! Due to this volume and buying power, we can give our clients access to the best finance rates and financing products across Australia.

Need further information?
If you require further financing assistance, either complete our friendly enquiry form or call an experienced finance consultant on 1300 003 462

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