Another popular fraud is for Employers to offer Employees the opportunity to lease one or more cars under a company leasing arrangement.
This has a number of advantages:
- The Employer is able to negotiate significant “fleet discounts” given they purchase a large number of cars each year
- The arrangement can be tax effective for Employees on a high marginal tax rate
- Running costs can me minimized by having an in-house garage and fuel purchase arrangements
Many Employees sign up for one or more cars on a lease arrangement for these reasons.
However the Employer will also provide some cars to a select group of employees as “tools of trade” such as salesmen who require a vehicle to actual be able to do their job.
A “company car” provided as a “tool of trade” is not part of that Employees “salary package” and the value of the car does not appear on the Employee’s Payment Summary (Group Certificate) and therefore the value of a “tool-of-trade” car does not form part of that Employee’s “final salary” for superannuation purposes.
However a dishonest Trustee will use the “tool-of-trade” car as an excuse to deduct the value of a leased car from a Member’s “final salary” even though the Governing Rules of the Fund to not empower the Trustee to make such a deduction.
The dishonest Trustee will then bluff a Member who queries why a deduction was made for the lease value of his or her car.
If the “grossed up” lease value of a leased car including operating costs is say $20,000 per annum and the Member is retrenched before the car lease is terminated, then the Trustee will unlawfully deduct $20,000 times the Member’s Benefit Multiple from that Member’s final salary Defined Benefit.
If a Member has a Member’s Benefit Multiple of say 5.0, then signing up for a company lease car has now cost that Member $100,000! That Falcon or Holden that looked like a good deal has suddenly turned into a very expensive car indeed!
If you believe that you may have been a victim of the “Company Car Fraud” then become a Member of Australian Guardians today.
Email email@example.com or leave contact details below.
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