18 Jun HOW WOULD YOUR ANSWER TO (A) DIFFER IF XYZ ONLY HAD 5 EMPLOYEES?
Guys, the previous work got messed up by not following my instructions, so please pay attention to every single sentence in the request! Please, if you don�t know how to complete this, let me know right away and I will sort it out! Thanks
Request:
Alan is an employee at XYZ Pty Ltd (XYZ). He has negotiated the following remuneration package with XYZ:
� _salary of $300,000;
� _Payment of Alan’s mobile phone bill ($220 per month, including GST). Alan is under a two-year contract whereby he is required to pay a fixed sum each month for unlimited usage of his phone. Alan uses the phone for work-related purposes only;
� _Payment of Alan’s children’s school fees ($20,000 per year). The school fees are GST free.
XYZ also provided Alan with the latest mobile phone handset, which cost $2,000 (including GST).
At the end of the year XYZ hosted a dinner at a local Thai restaurant for all 20 employees and their partners. The total cost of the dinner was $6,600 including GST.
(a) Advise XYZ of its FBT consequences arising out of the above information, including calculation of any FBT liability, for the year ending 31 March 2016. Assume that XYZ would be entitled to input tax credits in relation to any GST-inclusive acquisitions.
(b) How would your answer to (a) differ if XYZ only had 5 employees?
(c) How would your answer to (a) differ if clients of XYZ also attended the end-of-year dinner?
EXMPLE how it should be answered:
You need to find a few cases and sections in the textbook (Barkoczy,S.(2016).Foundations of Taxation Law. 8th edition. Sydney: CCH Australia ) to support your answers- just like here:
�Where there is difficulty determining the nature of item, Kumagai Gumi Co Ltd v FC of T 99 ATC 4316 considers that for the purpose of solving the problem in determining characteristics that falls under expense payment benefits, all other benefits will fall under residual fringe benefits�
Say something about FBT.
Then also mention benefits that are exemptions from FBT under FBTAA.
Also how many types of benefits FBTAA recognises & list them.
___________________________________________
Notes that might be helpful for the paper:
Employer�s responsibility is to deduct
All amounts need to have tax deducted first, and then calculate
Salary is not FB- fringe benefit item under section… It is ordinary income item.
Employer will deduct ordinary rate of tax.
Mobile phone bill =$220x 1/11= $20
The phone bill 200 will consider as fringe benefits
Calculation needs to be done for a year, not month
Then find out FBT events
Then mobile phone handset $2000 (deduct GST) so 2000×1/11=. Also mention what is the event under section�.
Certain number of employees can claim or not? It is in textbook. Find out if 20 employees can claim or not- if it is FBT. And then calculate again less GST.
At the end total FBT- count all the sums
47% or 49% FBT rate
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