LeasePlan Novated Leasing Presented by Peter Boutros & Trevor Warner

1. LeasePlan Novated LeasingPresented byPeter Boutros & Trevor Warner

2. Novated Lease Structure

3. Components of a Novated Lease • Purchasing of the vehicle • Lease rental • Vehicle maintenance and repairs • Comprehensive insurance • Fuel • Tyres • Registration & CTP • Other Provisions • Auto Club membership • FBT liability (reporting)

4. The ATO Guidelines – Residual Values • Option to use LeasePlan estimated lease end market value when considered less than minimum ATO guidelines

5. Employee support services • National Novation Centre (specialist LeasePlan in-house department) • Novated User Guide • LeasePlan Online – Internet Novated Solution • Monthly Vehicle Report – including FBT • LeasePlan monitoring of usage and cost performance • 24 hour 7 day a week maintenance support • End of lease support • Early termination support (leaving employment)

6. Employee Benefits

7. The benefits of a Novated Lease • Choice of vehicles- includes secondhand cars* • Major savings on the vehicle purchase price • Minimise GST/ Pre-tax savings on lease & operating costs • Residual Value helps build equity in vehicle • Opportunity of a tax free benefit at end of lease • Major savings on operating costs through fleet management controls • Optional Involuntary Redundancy Insurance*Conditions apply

8. Fringe Benefits Tax (FBT)

9. Fringe Benefits Tax (FBT) • Fringe Benefit Tax (FBT) is an employer levied tax which you contribute to via a salary deduction. • The calculation is based on annual kilometres travelled between 1 April and 31 March. • The estimated FBT liability calculation from your quote is based on your nominated kilometres. • Your monthly report will assist you in monitoring your FBT liability by tracking your actual usage. • FBT is based on actual kilometres which are calculated at the end of the FBT year (31 March). • Annualised kilometres.

10. Calculating FBT Liability • The Statutory method is based on actual distance travelled per FBT year for the of calculation of FBT

11. Fringe Benefits Tax (FBT) What happens if you do not make your kilometres? • Based on an FBT Base Value of $33,375.10… • It is therefore important to be realistic about your budgeted kilometres, • otherwise you may incur additional costs to your package.

12. Employee Contribution Method (ECM)

13. What is ECM? • ECM is where the employees make post-tax contributions towards the cost of operating the vehicle • Legitimate way of reducing FBT liability • The post-tax contribution reduces or eliminates the FBT • Can lower the overall cost of packaging a vehicle • Makes salary packaging more attractive to all employees who earn up to $180,000 per year

14. How ECM is calculated? • Vehicle FBT Base $30,000, 25000 km, Full Year • What ECM is needed to make the FBT liability NIL? • Calculate FBT Taxable Value? • FBT Taxable Value = FBT Base value x Stat Rate • FBT Taxable value =($30,000 x .11 ) • Therefore FBT Taxable Value = $3300 • Employee Contribution needs to be $3300.

15. ECM Benefits - Example Based On a vehicle lease over 36 months & travelling 15,000 kms per annum. Vehicle Lease Costs & FBT Vehicle Lease Costs & GST (no FBT) Post tax contribution ECM required to offset FBT

16. What to expect during the lease

17. What to expect during your lease • Driver’s kit and fuel card upon delivery. – Drivers MUST provide accurate odometer readings at each fill. • Servicing vehicle. • Monthly vehicle report. • FBT Declaration to be completed at the end of each FBT year. • Recalculation for distance variance/and or operating costs.

18. Monthly Reporting Statements • review all aspects of the vehicle budgets including FBT tracking • recalculation of their package to address variations • reports emailed monthly directly to novated drivers

19. Early Termination and End of Lease

20. Lease Payment Protection Insurance(Optional) Involuntary Early Termination • One off premium payment amortised into the lease, shown separately on the lease quote (currently $650) • Claimable if employee has suffered; • Involuntary redundancy • Permanent disability due to injury • Death

21. Lease Payment Protection Insurance (Optional) Involuntary Early Termination • The following monthly payment is to be made by the employee, and then the following three monthly lease payments can be claimed • The vehicle can be renovated to another employer or returned • If returned, LeasePlan can make a claim on the insurer, if the net sales proceeds are less than the lease payout figure • The maximum claim is $25,000

22. Early Termination (Options) - Voluntary The novation agreement immediately expires, if or when, employee terminates employment • There are 3 options available: • Payout the vehicle as at the end date of employment • Continue the lease by paying lease payments directly to LeasePlan • Enter into a new novation arrangement with new employer* * Please note: conditions and processes apply

23. Options at Lease End LeasePlan will advise you approx 3 months prior to end date of options: • Extend lease for further period • Offer to purchase at residual value plus GST • Utilise LeasePlan for new novated lease vehicle • Operating costs will be reconciled as soon as practicable (approx 7 days). This reconciliation will occur as an adjustment through payroll via SaryPlan

24. The University of Newcastle • 1000157071

25. Online Information for Employees • LP Website www.leaseplan.com.au • Drivers Online • Supplier Finder - nearest LeasePlan preferred dealer location - nearest fuel outlet location • Showroom> for new models • Car news & reviews> linked to Go Auto with tests & information on all makes and models • http://www.newcastle.edu.au/service/salary-packaging/

26. LeasePlan Contact Details • LeasePlan National Novation CentrePh: 1300 668 572 • cservice@leaseplan.com.au • www.leaseplan.com.au • The University of Newcastle Customer Number - 1000157071

27. Thank you for your attention • Any Questions