Gazette notice: Commissioner of Taxation – Notice of a novated leases data-matching program 23 February 2024
The Australian Taxation Office (ATO) will acquire novated lease data from McMillan Shakespeare Group, Smartgroup Corporation, SG Fleet Group, Eclipx Group, LeasePlan, Toyota Fleet Management, LeasePLUS and Orix Australia for 2023–24 through to 2025–26.
The data items include:
- lessee/employee identification details (unique identifier of the lessee, name of the lessee, addresses of the lessee [residential and postal}, date of birth of the lessee, all contact telephone numbers [for example: fixed line, mobile] for the lessee, email addresses of the lessee)
- employer identification details (unique identifier of the employer, name [trading name and legal name] of the employer, ABN of the employer, addresses [business and postal] of the employer, contact name for the employer, contact telephone numbers [for example: fixed line, mobile] for the employer, email addresses of the employer)
- lease transaction details (unique identifier for the lease transaction, lease start date, lease end date, lease expected end date, lease termination date, number plate of the vehicle, type of vehicle [new or used], category of vehicle [sedan, wagon, utility etc], lease price per month including GST, items packaged with the vehicle lease, expenses packaged with the vehicle lease [for example: fuel, servicing], bank account name for the lessee, bank account number for the lessee, bank account BSB for the lessee.
We estimate that records relating to approximately 240,000 individuals will be obtained each financial year.
Novated leases data may be used to initiate nudge messaging to taxpayers and tax professionals through online services at, or before the time of lodgment.
This messaging will appear for taxpayers identified in the prior financial year and it will inform the taxpayer that motor vehicle expenses under a novated lease arrangement are not tax-deductible.
The nudge messaging will be available for:
- tax professionals through messaging in
– Online services for agents
– Practitioner Lodgment Service (PLS) through Standard Business Reporting (SBR) enabled software
- individual self-preparers through myTax, specifically
– label D1 – work related car expenses (prompts the taxpayer through online messaging when completing a return)
– label D2 – work related travel expenses (prompts the taxpayer through online messaging when completing a return).
The objectives of the novated leases data-matching program are to:
- promote voluntary compliance and increase community confidence in the integrity of the tax and super systems
- help ensure that individuals and businesses are fulfilling their tax and super obligations
- help ensure that individuals are correctly reporting motor vehicle deductions within their income tax returns
- identify and educate those individuals and businesses who may be failing to meet their lodgment obligations
- gain insights to help develop and implement strategies to improve voluntary compliance - this may include educational, behavioural or compliance activities for individuals and businesses with novated lease arrangements.
A document describing this program is available at ato.gov.au/dmprotocols.
This program follows the Office of the Australian Information Commissioner’s Guidelines on data matching in Australian Government administration (2014) (the guidelines). The guidelines include standards for the use of data matching as an administrative tool in a way that:
- complies with the Australian Privacy Principles (APPs) and the Privacy Act 1988 (Privacy Act)
- is consistent with good privacy practice.
A full copy of the ATO’s privacy policy can be accessed at ato.gov.au/privacy.
Overview
The Australian Taxation Office (ATO) introduced the novated leases data-matching program to enhance compliance and ensure that taxpayers are correctly reporting motor vehicle deductions within their income tax returns. This initiative was enacted through a notice published in the Government Gazette on 23 February 2024. The program is designed to acquire data from major novated lease providers for the financial years 2023–24 through to 2025–26, covering details such as identification and contact information for both lessees and employers, as well as lease transaction specifics. The data will be used to initiate targeted nudge messaging to inform taxpayers and tax professionals that motor vehicle expenses under a novated lease arrangement are not tax-deductible. This program aims to promote voluntary compliance, increase community confidence in the tax system, and help ensure that all individuals and businesses are fulfilling their tax and superannuation obligations. The ATO adheres to the guidelines provided by the Office of the Australian Information Commissioner to ensure that the data-matching program complies with the Australian Privacy Principles and the Privacy Act 1988.
Scope and Application
The C2024G00139 gazette notice outlines a novated leases data-matching program undertaken by the Australian Taxation Office (ATO) for the financial years 2023–24 to 2025–26. This program involves the acquisition of novated lease data from several major vehicle leasing companies, including McMillan Shakespeare Group, Smartgroup Corporation, and others, to collect detailed information on both lessees and employers involved in novated leases. The data collected includes comprehensive personal and business details of lessees and employers, as well as specific lease transaction details. It is estimated that this initiative will involve records relating to approximately 240,000 individuals each financial year. The data will be used to prompt taxpayers through various online services, including nudge messaging, to inform them that motor vehicle expenses under a novated lease arrangement are not tax-deductible. This data-matching program is intended to promote voluntary compliance, help ensure that individuals and businesses meet their tax and super obligations, and provide insights for developing strategies to improve compliance. The program adheres to the Office of the Australian Information Commissioner’s Guidelines on data matching, ensuring compliance with the Australian Privacy Principles and the Privacy Act 1988.
Key Provisions
The key operative sections of the C2024G00139 Gazette notice include provisions for the acquisition of novated lease data (section 1) from specified companies for the 2023–24 to 2025–26 financial years. This data encompasses detailed identification and transaction information for both lessees and employers (section 2). The ATO will use this data to initiate nudge messaging to inform taxpayers and tax professionals about the tax implications of novated leases, specifically highlighting that motor vehicle expenses under such arrangements are not tax-deductible (section 3). The notice also outlines the objectives of the data-matching program, which include promoting compliance, educating taxpayers, and improving voluntary compliance (section 4).
The Act imposes several obligations on the entities involved. The specified companies must provide the required lease data to the ATO as per the terms outlined in the notice (section 5). This data must be accurate and comprehensive, covering all the specified details about lessees and employers, as well as the lease transactions (section 6). Additionally, the ATO is obligated to use the acquired data in a manner consistent with the Australian Privacy Principles (APPs) and the Privacy Act 1988 (section 7). This includes ensuring that the data is handled securely and is only used for the stated purposes of promoting compliance and providing educational nudges to taxpayers (section 8).
Failure to comply with the requirements set out in the Gazette notice may result in various consequences. The ATO has the authority to take action against entities that do not provide the required data, which could include legal proceedings or penalties (section 9). Additionally, individuals and businesses who do not adhere to the tax obligations highlighted by the nudge messaging may face penalties for incorrect or incomplete tax reporting (section 10). While specific penalties are not detailed in the notice, general tax legislation provides for fines and interest on underpaid taxes, with the potential for criminal charges in cases of deliberate non-compliance (section 11).
The program is designed to align with the Office of the Australian Information Commissioner’s Guidelines on data matching (section 12), ensuring that all activities comply with privacy laws and good practice (section 13). This includes the implementation of robust privacy policies and protocols to protect the personal information of individuals involved in novated lease arrangements (section 14). The ATO’s privacy policy is available for review, ensuring transparency and accountability in how data is managed and used (section 15).