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Salary Sacrifice of Laptops

Discussion in 'Accounting, Tax & Legal' started by DaveA, 11th Apr, 2007.

  1. DaveA

    DaveA Well-Known Member

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    one of the good things the government has allowed us to do...

    Now i know the basics, one per fbt year, no fbt. Tax is apportioned as a deduction back over a 1 year period from purchase, gst is claimed back immediatly

    However im wondering can you purchase any laptop anywhere and still salary sacrifice it? Or do i have to buy it from a company who offers a salary sacrifice option when purchasing it? i know there are plenty of internet stores who do the salary sacrificing?

    has anyone sacrificed one which can share their views on the process?
     
  2. GavinC

    GavinC Active Member

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    It shouldn't matter where you buy the laptop, unless your employer has some restrictions on how they manage their salary sacrifice arrangements.

    You can also double dip with laptops (ie you get the benefit of salary sacrifice, but you can also depreciate the laptop, assuming you use it for work). Don't ask me how though as i've never done it, and none of my clients ever asked me about it. I believe there is a draft ruling on it floating about.
     
  3. DaveA

    DaveA Well-Known Member

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    i know you can no longer double dip, the ruling which said you could (in 95) has been reversed by the ATO, ill try dig it up again..
     
  4. julia

    julia Active Member

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    The double dip loop hole was closed in the rewrite in the 1997 Act. As long as it is ok with your employer you can buy the laptop anywhere and just take the receipt to your employer for reimbursement.

    Julia
    bantacs.com.au
     
  5. MattR

    MattR Well-Known Member

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    I know this is a slightly old topic but since I was looking....I thought you could still "double dip" - I just rang the ATO and the officer said it was OK. Since I am doing FBT returns at present it was a significant question for me aswell.

    If you look at it is not really "double dipping" if the employee buying the laptop is using it for work purposes. All they are doing is buying it with pre-tax dollars, by getting their employer to buy it for them. The employee still effectively bought it by sacrificing their income to do so, hence they are entitled to depreciate it.

    If they bought it with after tax dollars then they would be claiming a deduction (albeit depreciation) for it, if it was for work purposes. This in turn would lower their taxable income, which is a very similar position to the one obtained via sacrificing.

    The real difference is that there is a specific FBT exemption available for the laptops.

    As far as I am aware this benefit is still available. If there is a ruling to the contrary I would be very grateful if someone cold post a link.

    Cheers
     
  6. julia

    julia Active Member

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    Last edited by a moderator: 24th May, 2007
  7. MattR

    MattR Well-Known Member

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    I still think that it's OK - refer TD 2005/D17, particulalry para's 6,7, & 8.

    TD 2005/D17 - Income tax: is an employee's deduction for the decline in value of a depreciating asset used for a taxable purpose affected by section 51AH of the Income Tax Assessment Act 1936, if they are subsequently reimbursed an amount for the cos


    The trick with salary sacrificing is to do it for future income - lose the word reimbursement and you're better off. So an arrangement today in advance for my next months wages to be reduced by the cost of a laptop (say) should satisfy the salary sacrifice requirements.

    I think the legislation is more directed at stopping two people, the employer and the employee, claiming the same deduction twice. With the laptop situation they are not claiming it twice. As far as the employer is concerned what do they care if they pay you via a laptop or cash - they don't, (in fact it can help reduce their 9% SG -bit of a sneaky trick that one), you still cost them the same, and hence they deduct the same amount from their assessable business income.