An industry body warns strong take-up will only continue if the generous tax break remains.
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Generous FBT exemptions on low-emission vehicles are working as intended, an industry body says, with the latest figures showing sales of plug-in hybrids (PHEVs) up 130 per cent in the first half of the year.
Novated leases peak body National Automotive Leasing and Salary Packaging Association (NALSPA) said the tax break was “opening the door” for Australians to choose more eco-friendly vehicles.
“The overwhelming feedback we are getting from our members and their customers is that the FBT exemption is undoubtedly driving Australians across metropolitan and regional locations to get behind the wheel of PHEVs,” chief executive Rohan Martin said.
PHEVs accounted for 17 per cent of all electrified passenger and SUV sales last month, up from 6.6 per cent in June 2023, and made up around 22 per cent of electrified SUV sales for the year to date, up from 10.6 per cent in the first half of 2023.
Regular hybrid vehicle sales were also up 113 per cent, according to data from the Federal Chamber of Automotive Industries.
FBT exemptions were introduced in 2022 for novated car leases of EVs or PHEVs worth below $89,332. It allows taxpayers to deduct the cost of finance and maintenance of an EV from their pre-tax salary.
The exemption on an eligible vehicle valued at $50,000 can save employees up to $9,000 annually.
While the tax break is permanent for EVs, it will no longer apply for PHEVs starting 1 April next year.
Martin said PHEVs were an important low-emissions option for many drivers who were not prepared to make the switch to a fully electric vehicle. “Australians want to reduce their carbon footprint and their vehicle running costs, but for many making the transition to a full EV is not an option that suits their transport, lifestyle or work needs, especially for those living in regional Australia.”
He said PHEV sales would continue surging as long as the FBT exemption remained.
“For many, the FBT exemption makes PHEVs more attractive than their traditional combustion engine equivalent models, especially when reducing emissions is a key consideration.”
“Every PHEV purchased drives down Australia’s total transport emissions and that’s critical for our journey to net zero.”
Christine Chen 05 July 2024 accountantsdaily.com.au
Born in Mansfield in the Victorian high country, Andrew started school in Orbost. After graduating from Melbourne University in 1992, Andrew commenced his career with what was then Price Waterhouse (now PWC). Andrew moved to Bairnsdale in 1995 and has lived in East Gippsland ever since. One of the founders of the practice in 2000, the year GST came to Australia, Andrew is married to Michelle, a third generation East Gippsland resident, and proud father of Nelson and Georgia, who attended local schools for their primary and secondary education.
Andrew and Georgia are keen participants in triathlon and multi-sport events, and in 2022 participated as father and daughter in the Age Group Triathlon World Championships in Abu Dahbi. This year, they will participate together in the Multi-Sport World Championships in Townsville.
As the owner and founder of a business in East Gippsland, Andrew understands the local issues that impact on your business. The impact of flood, bush fires, drought, and the vagaries of world commodity prices can be better understood when you are deeply immersed in the local community.
Dealing with banks and the Australian Taxation Office when you live in a rural area is easier to understand when they happen in your back yard.
Ryan Gaul CA
Ryan, a Chartered Accountant, relocated from Essendon to Lakes Entrance in 2020 to be with his wife, Morgan. In Melbourne, Ryan worked under the guidance of accountant and player manager Peter Jess, serving clients that ranged from small to medium-sized businesses, AFL players, entertainers, and athletes.
After his move to Lakes Entrance, he joined Martin Taylor Associates. Since joining the firm Ryan has enjoyed the challenges of the agricultural sector and has worked closely with Andrew to develop his knowledge in this area.
Ryan is actively involved in the local community. He joined the Buchan Football Netball Club as a player and took on the role of Treasurer. He also serves as the Treasurer for the East Gippsland Farm Dog Group. Ryan’s wife Morgan runs her own speech pathology business which services the East Gippsland region.
Jan Roach
Jan has worked in public accounting in Orbost for 40 years and is one of the founders of the practice. Married to Johno (now retired long-term builder), proud mother of Adam, Paul and Nick and proud grandmother to Owen, Tess, Teagan, and Millie.
Having been in business, Jan understands compliance can sometimes be overwhelming, and will help you navigate the right path. Jan has a strong affiliation with our trade and primary producer clients.
Kerry Ellis
Kerry has worked in administration in public accounting and legal practices for nearly 15 years. Kerry understands when you contact us, you need to talk to someone who has or can get an answer to your query. Kerry controls the workflow in our practice and manages our interactions with the ATO, ASIC and the banks. Kerry understands the challenges of providing information to big bank data centres and dealing with Centrelink.
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