Taxation Law Assignment Solution

This assignment solution provides answers to questions related to PayG deductions, superannuation guarantee obligation, computation of net tax payable, GST credits, and PAYG tax withheld. The solution also includes a business activity statement and a reference list. The subject is Taxation Law and the course code and college/university are not mentioned.

Running head: TAXATION LAW
Taxation Law
Name of the Student
Name of the University
Authors Note
Course ID

1TAXATION LAW
Table of Contents
Answer to question 1:.................................................................................................................2
Answer to question 2:.................................................................................................................2
Answer to question 3:.................................................................................................................2
Answer to question 4:.................................................................................................................5
Answer to question 5:.................................................................................................................5
Reference List:...........................................................................................................................9

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Answer to question 1:
Calculation of PayG Deductions and Net Wages Payable
Payee's
Name
Annual
Salary
Gross Weekly
Salary
Tax
Withheld
Tax
Applicable
Net Weekly
Wages
Sarah 52000 1000 183 0 817
Ellie 18720 360 1 0 359
Micheal 62400 1200 252 0 948
Lisa 28600 550 48 0 502
Mitch 0 0 0 Nil
Clintalle 220 0 0 Nil
Total 484 2626
Answer to question 2:
Calculation of Superannuation Guarantee Obligation
Payee's Name Salary
Quarterly Times
Earnings Superannuation Guarantee
Sarah 52000 13000 1235
Ellie 18720 4680 444.6
Micheal 62400 15600 1482
Lisa 28600 7150 679.25
Mitch 1500 1500 142.5
Clintalle 3190 3190 303.05
Answer to question 3:
Computation of Net Tax Payable
Inclusive
of GST GST
Particulars Amount
($)
Amoun
t ($) Section Amount
($)
Assessable Income:
Training Fees $
82,698.00
$
8,269.8
0
Section 6-5 of
ITAA 97
$
74,428.2
0
Share of Prize money from
Customer horses
$
44,000.00
$
4,400.0
0
Section 6-5 of
ITAA 97
$
39,600.0
0
Prize money from Broadmeadow $ $ $

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Park Owned Horse 16,500.00 1,650.0
0
14,850.0
0
Trophy from Brisbane Cup $
1,200.00
$
120.00
$
1,080.00
Trade-in of tractor previously used
on property
$
18,000.00
$
1,800.0
0
$
16,200.0
0
Hey and Saddle blanket donated to
local pony club
$
100.00
$
10.00
$
90.00
Total GST Input $
1,62,498.00
$
16,249.
80
$
1,46,248.
20
Total Assessable Income
$
1,29,998.
40
Allowable Deduction:
Horse Feed $
8,800.00
$
880.00
Section 8-1 of
ITAA 97
$
7,920.00
Cost of Goods Sold $
4,750.00
$
475.00
$
4,275.00
Veterinary Fees $
6,600.00
$
660.00
Section 8-1 of
ITAA 97
$
5,940.00
Farrier $
5,500.00
$
550.00
Section 8-1 of
ITAA 97
$
4,950.00
Accommodation for Staff at race
meeting
$
2,475.00
$
247.50
Section 8-1 of
ITAA 97
$
2,227.50
Airfares for staff to attend race
meeting
$
5,346.00
$
534.60
Section 8-1 of
ITAA 97
$
4,811.40
Bookkeeping Service $
2,640.00
$
264.00
Section 8-1 of
ITAA 97
$
2,376.00
First Aid course for Staff members $
880.00
$
88.00
Section 8-1 of
ITAA 97
$
792.00
Business loan repayment $
1,025.00
$
102.50
Section 8-1 of
ITAA 97
$
922.50
Total Allowable Deduction $
38,016.00
$
34,214.4
0
Total GST Output
$
3,801.6
0
Taxable Income $
95,784.0

4TAXATION LAW
0
Total GST Payable
$
12,448.2
0
As stated under “section 6-5 of the Income tax assessment act 1997” income that is
earned directly from the business activities will be considered as the assessable income. As
evident from the present situation it is found that Broadmeadow Park earned income from
training fees will be held assessable under “section 6-5 of the ITAA 1997” (Barkoczy 2016).
There were other receipts such as share of prize money, trophy from Brisbane Cup and trade
in tractor would be considered for assessment and would attract tax liability.
Additionally, the receipts derived would be considered for GST under the GSTR 1999
for the receipts of supplies. Furthermore, it has been noticed that a Broeadmeadow incurred
expenditure which can be considered as allowable deductions under “section 8-1 of the
ITAA 1997”. A business can claim an allowable deduction for the salaries and wages that is
paid by the company to their workers along with the superannuation contribution made for
them (Woellner et al. 2016). Since the business carried on by the Jimmy is a company
therefore, as per the Australian taxation office Broadmeadow can claim an allowable
deduction for the wages that is paid by the company to the workers. Additionally, it has also
been found that Broadmeadow incurred a superannuation expenditure on the employees.
Therefore, the business can claim an allowable deduction on the superannuation contribution
which they make in compliance with the super fund for the certain employees.
The taxation ruling of 97/17 states that a deduction under “section 32-5 of the ITAA
1997” would not be considered as an allowable deduction since they are entertainment by
food or drink. Jimmy, incurs an expenditure on the local restaurant for its customers.
“Division 32 of the ITAA” states the general prohibition regarding the deductibility of the

5TAXATION LAW
expenditure incurred on entertainment. As held in the case of “Bow and others v. Heatly
(1960) STL 311” stated that entertainment expenditure incurred on meal would be
considered as non-allowable deduction. Therefore, the meal expenditure would constitute as
fringe benefit under the “Fringe Benefit Tax Assessment Act 1986” and would be subjected
to Fringe Benefit Tax (Woellner et al. 2016). Additionally, “Division 9A under Part III of
the FBTAA” provides an employer that provides meal entertainment to the associates to
consider the value of the benefit by using either of the two methods. Therefore, in respect of
the “Section 8-1 of the ITAA 1997” Jimmy can claim an allowable deduction for the
expenses incurred and the GST amount would be payable in respect of the GSTR 1999.
Answer to question 4:
According to the Australian taxation office a person can GST credits given that the
business is registered to claim GST credits. As a result, Jimmy can claim a GST credits
however he would be required to obtain a GST registration. Since Jimmy has obtained the
registration, he can claim GST credits for the amount of GST that is included in the price he
pays for the things that is used in his business. However, it is found that Farrier is not
registered for GST and Jimmy would not be allowed for claiming GST credits since the
Farrier is not registered for GST.
There are large number of factors that ascertains whether an acquisition would be
considered as creditable purpose and for which input tax credit can be claimed. The practical
guidance in this regard is that Farrier is not registered for GST and it cannot be considered as
the creditable acquisition.
Answer to question 5:
Goods and
services tax (GST)
for the above mentioned QUARTER

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BUSINESS ACTIVITY STATEMENT
Complete Option 1 OR 2 OR 3
(indicate one choice with an X)
Option 1: Calculate GST and
report quarterly
O
R
Option 2: Calculate GST and report
annually
Total sales
G
1 $
1,6
2,4
98 Total Sales
G
1 $
1,62
,498
Does G1 include
GST
Ye
s
N
o
O
R Does G1 include GST Yes
N
o
Export Sales
G
2 $
O
R
report GST on sales at 1A and GST on
purchases at 1B in the summary section
over the page
Other GST - free
sales
G
3 $ 0 O
R
Capital
purchases
G
1
0 $ 0
O
R
Option 3: Pay GST
instalment amount
ATO
installment
amount
G
2
1 $ $0
Non-capital
purchases
G
1
1 $
0 O
R Write the G21 amount at 1A in
summary over the page (leave 1B blank)
OR if varying this amount, complete
G22, G23, G24
Estimated net GST for
the year
G
2
2 $
report GST on sales at 1A and GSt on
purchases at 1B in the summary
section over the page
Varied amount for the
quarter
G
2
3 $
Write the G23 amount at 1A in
summary section over the page
(leave
1B
blank)

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Reason code for
variation
G
2
4 $
PAYG Tax withheld PAYG income tax installment
Total Salary,
wages and other
payments
W
1
$
2,6
26
Complete Option 1 OR
2
Amount withheld
from payments
shown at W1
W
2
$ 484
Option 1: Pay a PAYG
instalment amount
ATO Instalment amount T
7
$ 167
90
Amount withheld
where no ABN is
quoted
W
4
$
Write the T7 amount at 5A in summary
section below OR if varying this amount,
complete T8,T9,T4
Other amounts
withheld
W
3
$ Estimated tax for year T
8
$
Total amounts
witheld
(W2+W4+W3)
W
5
$ 484
Varied amount for the
quarter
T
9
$
Write the W5 amount in the Summary
section below
Write the T9 amount at 5A in the
Summary section below
Reason code for
variation
T
4
OR
Option 2: Calculate PAYG instalment
using income x rate
PAYG instalment
income
T
1
$ 1,47
,725
Commissioner's rate T
2
0.00
%
%
OR
New varied rate T
3
%
T1 x T2 (or T3)
T
1
1 $ 0
Reason for code
variation
T
4

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Summary
Amounts you
owe the ATO
Amounts the ATO owes
you
GST on sales or
GST Instalment
1
A $
14,773
GST of purchases
1
B $ 0
Do not complete 1B if using GST
instalment amount (Option 3)
PAYG tax
withheld 4 $ 484
Credit from PAYG
income tax instalment
variation
5
B $
PAYG income tax
instalment
5
A $ 16,790
Deferred
company/fund
instalment 7 $ 0
1A + 4 + 5A + 7
8
A $ 32,047
1B +
5B
8
B $ 0
Payment or Refund?
Is 8A more
than 8B?
Yes, then write the result of 8A minus 8B at 9.
This amount is Payable to the ATO 9 $ 32,047
No, then write the result of 8B minus 8A at 9.
This amount is Refundable to you by the
ATO

9TAXATION LAW
Reference List:
Barkoczy, S., 2016. Foundations of Taxation Law 2016. OUP Catalogue.
Woellner, R.H., Barkoczy, S., Murphy, S., Evans, C. and Pinto, D., 2016. Australian
Taxation Law Select: Legislation and Commentary 2016. Oxford University Press.