ATO announces data matching program on novated leases – employer implications?
The ATO has advised it will be undertaking a data matching program with information sourced from novated lease providers in respect of the years 2018-19 to 2022-23.
The ATO will source data from the following novated lease providers:
- Eclipx Group;
- LeasePlan;
- LeasePLUS;
- McMillan Shakespeare Group;
- Smartgroup Corporation;
- SG Fleet Group;
- Toyota Fleet Management; and
- Orix Australia.
The ATO will obtain the following information from the above providers:
- Details of the lessee/employee (incl. name, address, date of birth, contact details etc.)
- Details of the employer (incl. name, ABN, address, contact details etc.); and
- Details of the lease (incl. start and end dates, vehicle details, lease amount, packaged expense, payment along with the terms of the lease).
The stated objectives of the program are to help ensure individuals and businesses are fulfilling their tax and superannuation obligations.
Where an organisation has novated lease arrangements in place (including during those abovementioned years), it should ensure the correct tax treatments are applied.
Primarily organisations should be satisfied:
- compliant salary packaging arrangements are in place (refer TR 2001/10);
- the correct FBT treatment has been applied where vehicles are used to provide fringe benefits;
- the correct GST is remitted to the ATO on any employee contributions made in respect of those fringe benefits;
- Reportable Fringe Benefits (‘RFB’) are correctly disclosed (refer to our May 2020 TaxEd Update article regarding the RFB ‘pooled car’ exclusion and the ATO view in relation to whether it applies to novated lease arrangements) ; and
- superannuation is correctly calculated on pre-salary sacrificed ordinary time earnings (refer to our article regarding the RFB ‘pooled car’ exclusion on relatively recent changes to superannuation contributions here).
Further information on the ATO’s data matching program can be found here.
A note of warning – a common FBT issue with novated lease vehicles such as utes, dual cabs and greater than 1 tonne load carrying vehicles is whether FBT exemption can be claimed on the basis of private travel being only home to work travel and other minor infrequent and irregular private travel. Given the employee may be salary sacrificing the lease costs it is ‘unusual’ the employee would agree to restrictions on private use.