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Does anyone know formula CSA uses to calculate benefit of work vehicle on income?

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I lease  a vehicle for work via my business buy have it for private use also.

The cost of the car was $40k ,i drive for work/personal 20 000km / year and it costs my business between $1100- $1200 per month in vehicle expenses.

The vehicle is tax exempt as it's a ute designed to carry more then one tonne.

The vehicle has been calculated as a benefit of $14852 to me and added onto my income.


My business accountant doesn't know how they came up with that figure and when I rang CSA to question their calculations  they directed me to reference Voss vs CSA (2009) which still doesn't explain their calculations .

Anyone have an idea?
You need to have this vehicle fully attached to the business and not listed for private use. You will find it hard to get C$A to be reasonable about this as a deduction because they will view it as a Fringe Benefit. It looks like they have multiplied $1200 by 12 mths ($14400).
That's what I figured they might have done. When I put it through the ATO system of calculating car as fringe benefit I get $8000 ?  . The car is listed under the business and I use it approx 30 % of the time for personal use.

Doesn't seem fair to calculate it as a benefit of $14852.
C$A are not accountants and dont have to justify their  calculations. You will need to restructure your businesses expenses so the car does not appear as a Fringe Benefit.

Can you salary sacrifice the vehicle through a novated lease? Then as  FBT exempt it shouldnt appear on a group certificate as income.
It currently doesn't appear on my group certificate as a fringe benefit.
It is not considered tax wise a fringe benefit as the vehicle is one that it tax exempt.

Income wise - I get the profits of my business after the expense deductions are taken out. The vehicle only appears on my profit and loss statements as a business expense.
I am confused as to how they calculate an expense is an addition to your income. Lodge an objection to make sure they are not pulling your chain. $14K is a lot of income on paper that you obviously dont have throw around.

I have seen other members on this site recommending that self-employed people get onto someone else's payroll as C$A are habitually stuffing up COA etc through their inability to understand business finance. Is this an option for you?

Why dont C$A use your tax return for your assessments?
BDouble I agree … It is confusing.

They did use my tax return for the assessment and saw the car was not

This is what was said in my COA invesitgation…

"it is noted that in 2010/2011 financial year, he maid no claim on his personal income tax return in relation to work related vehicle expenses. The value of that vehicle in the 2011 finical year amounted to $14782"

It was also said…

"it is well established that being employed in ones own business can give a taxpayer advantages not enjoyed by ordinary workers. Such advantages may include for example income tax deductions related to the use of a motor vehicle. Such deductions reduce taxable income but can also reduce the parents general living expenses and/or increae the parent's financial resources. Whilst these types of deductions can be quite legitimate for taxation purposes, they nonetheless provide the parent with a benefit that is deemed to be a financial resource for the purposes of calculating child support ( see Voss' case (2009) FMCAfam 1296) "

So BDouble - but this statement contradicts what i did as I didn't deduct car expenses from my personal tax income or add on a fringe benefit as it was tax exempt.

It is a leased work vehicle owned by the business so it's expenses are deducted from the profits.

Graeme70 said
My business accountant doesn't know how they came up with that figure and when I rang CSA to question their calculations  they directed me to reference Voss vs CSA (2009) which still doesn't explain their calculations .
I suggest that you make a complaint, referring you to legislation is not how they made the calculation, they have basically refused to answer a valid question that you have the right to know the answer to. I would suggest in addition to complaining to the CSA to also complain to the Ombudsman, to your local federal MP and to the federal MP who has DHS in their portfolio (Brendan O'Connor) :-


DHS - Contact - Minister for Human Services said
Contact the Minister
Parliament House
Suite M1.24
Parliament House
Canberra ACT 2600

    Phone: (02) 6277 7200
    Fax (02) 6273 4406
    Email: minister@humanservices.gov.au

NB: for any meeting and event or speech requests, please email us at invitations.mhs@humanservices.gov.au
I agree with MikeT, get the ball rolling on a complaint. This calculation is incorrect as you dont have access to the $14K they are referring to. It is an expense, not an income. Good Luck.
Yeah I have argued the same thing to the CSA and SSAT also to the Ombudsman twice with no luck as yet.

A work vehicle is a work vehicle and all the added on paper loss of depreciation, bank interest on loans, fringe taxes, etc are there for a tax purpose.
I cant justify how a paper loss for a business vehicle gets added back onto your income when its not fisical money in your hand, so how can it be classed as an income, that has got me beat.
I think the issue is they think by having use of that car it equals $14872 in value to me.

I am guessing they got the figure $14872 from my yearly business (not personal) work vehicle expenses.

I agree with CSA in that I do have a benefit by using the work vehicle but I  don't have 100% benefit of the car. I work 6-7 days and it's their for other staff to use. I have approx 30% personal use of the car.

So really the benefit of the car would equal $4461
(30% of the total yearly cost) or at least $8000 if calculated via ATO fringe benefit for car calculator not $14872.

But I imagine if I had to prove that I might need a log book which I advise wouldn't need to use at all as the vehicle is fringe benefit exempt.

As I have an objection to a COA already in progress should I write a letter which also details why they shouldnt add the $14972 to my income ?
You should definately highlight your 30% use and the fact that other employees use it for the other 70%. Either that or just totally exclude any personal use and advise them its now only used for 100% business use. You will get stung with a big C$A bill if you allow them to count it as income.
http://www.fmc.gov.au/...d%20Anor%20(SSAT%20Appeal)%20[2011]%20FMCAfam1311.rtf

76.   Finally, Mr Frost drew my attention to a decision, Ladd v Child Support Registrar & Anor,  a decision of Sexton FM.  In that case, Her Honour determined that the SSAT had reached a conclusion of depreciation, which was not available to it on the evidence.  In particular, Sexton FM said as follows:
the Tribunal failed to understand that it needed to look at the whole of the financial evidence of the appellant, including the financial records of his company, in the context of determining what the actual personal financial resources of the appellant really were. This required a careful analysis of the personal benefits the appellant actually had available to him from the company, (such as the car, telephone, drawings and salary).

Accordingly, it considered that the moneys claimed for depreciation could be used for child support.  

How can they say that money claimed as depreciation can be used as child support money.
Depreciation is a paper loss.
Taylor - my understanding of that reference ( and it could be wrong as I am still trying to get thru the fluffiness of legal jargon).

You can depreciate goods of your income as long as you can show that the money written off as an expense is later ear marked for future provisions of equipment.

Mr Frosts objection was dismissed as he was able to buy more equipment (?) out of profits and so the money previous depreciated would be available to use for another purpose (paying child support ha ha )
I am gathering on that case and others that I have read, that you say that your depreciation is set aside
for future plant and equipment.
Therefore the depreciation doesnt get added onto your taxable income amount.

Mike T can you elaborate further.?????????
Taylor said
Mike T can you elaborate further.?????????

I can't really. The problem is that I have little, if any, knowledge of business accounting.
They probably worked out what it would cost for you to lease the car yourself. A 40k car would cost about 14k per year to lease and maintain. Otherwise they just pulled a figure from the air in order to get your child support income up to a figure they thought would reasonably increase your liability so they can justify their performance pay. Does this help?
A depreciating asset is an asset that has a limited effective life and can reasonably be expected to decline in value over the time it is used.
Examples of depreciating assets include:
computers
electrical tools
furnishings
carpet and curtains
motor vehicles.

It is the decline in value of an asset.

"Decide that you want it more than you are afraid of it."
Bill Cosby
 :thumbs:
Tulip said
It is the decline in value of an asset.
I understand this aspect. However I cannot understand how buying, say a computer as a requirement to run the business, that the depreciation (delayed consideration of the business cost) is then considered by the CSA to be "personal income". I believe it is an unjust, unfair and fraudulent scam that is helping to destroy many who some say are the backbone of the Australian economy. as per:
SMALL BUSINESS STILL THE BACKBONE OF ECONOMY said
A new report released today confirms Australias two million small businesses are the backbone of the Australian economy.)
Sourced from - Department of Industry, Innovation, Science, Research and Tertiary Education Website Archive - 30th Oct 2011
Thanks Fairgo I worked out that their calulations might be based on that however I only use the car for personal use 30% of time other employees use it as well seems unfair to calculate a benefit on 100% of it's running costs.

Found some more info from another forum regarding depreciation




If you are depreciating the plant & equipment all well & good. You may have a problem if you are doing that as well as deducting interest on the loan if the Parkin & Sykes case is any indicator.

QUOTE .. To suggest that the payment of interest on the loan, already claimed as a deduction, can also support a deduction for depreciation is double counting. Depreciation is a capital allowance, and to the extent to which the loan repayments included some, albeit minor, component of capital, it represented a very small part of the claimed depreciation. I am therefore satisfied that the fathers income for child support purposes for these periods should be adjusted by writing back the depreciation deductions… END QUOTE

Are you claiming depreciation on a new kitchen & bathroom? Are they in an investment property? If not, how are they related to earning an income?

If the work related vehicle was a truck or tractor that is used for work only & parked at all other times it would be okay. If on the other hand you have a nice v8 ute that you use all the time, then they will probably successfully argue a personal benefit that should be addressed. If you are depreciating that as well, then that would be another proportional write back.

They also referred to this article by Parkin and Sykes (2011)
Parkin & Sykes [2011] FMCAfam 842 (18 August 2011)




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