Wouldn't We All Like to Pay Less to the Tax Man?

Have you considered using your car as a means of reducing your taxes? Always, the best place to start is to get advice from your accountant who knows your specific situation. But more often than not, if you are any of the following, you may be eligible to use your car to reduce your tax:

• Salary packaging for cars is offered by your place of employment
• The predominant use of your car is for business
• You are a business

Salary Packaging For Cars:

Salary Packaging for vehicles is becoming increasingly more popular for employers as it increases the benefits to the employee without increasing the remuneration costs. The most common type of salary packaging for cars is a Novated Lease. A Novated lease is like a standard car lease except the responsibility for the lease payments is taken on by the employer - know as novation.

Novated Lease can be either non maintained or full maintained. Lease payments are made from the employee's pre tax salary. This means it reduces their taxable income and therefore the amount of tax paid. However, Fringe Benefits Tax does apply which means that salary packaging a car is not equally beneficial for all therefore this needs to be considered.

More than 50% Business Use?

If you are using your car for business use more than 50% of the time, you need to speak to your accountant as you should be able to claim this in your tax return. Business use does not mean driving to and from work. Business use means driving to meetings and appointments. Claiming your car for business use may mean you need to sign a Business Purpose Declaration. Car finance products that can be used are:

• Chattel Mortgage
• Hire Purchase
• Car Lease

Are you a Business?

There is a large range of car finance options available for businesses. However, again it is best to contact your accountant to determine which is best suitable and appropriate as it is dependent on the way the business's financials are structured.

Article Source: EzineArticles.com