Advanced Taxation Law Assignment: Financial Year Analysis & Tax Return

This assignment solution provides a comprehensive analysis of advanced taxation law, focusing on the financial year from July 1st to June 30th. It includes a detailed breakdown of income and expenses for a business, calculating Cost of Goods Sold (COGS), gross profit, and net profit. The solution addresses various aspects of taxation, such as tax returns, franking accounts, Business Activity Statements (BAS), PAYG installments, and Fringe Benefit Tax (FBT). It also highlights penalties for non-compliance with ATO regulations, including late filing and incorrect dividend tax reporting. The assignment references relevant ATO resources and provides a step-by-step approach to calculating tax liabilities and understanding tax obligations. The solution covers topics like tax loss carried over, input tax credits, and fully franked dividends, offering a practical understanding of tax compliance and financial reporting.

Advanced Taxation Law

TABLE OF CONTENTS
1 and 2..........................................................................................................................................3
3...................................................................................................................................................4
4...................................................................................................................................................4
5...................................................................................................................................................4
6...................................................................................................................................................5
7...................................................................................................................................................5
8...................................................................................................................................................5
REFERENCES................................................................................................................................6

1 and 2.
Particulars Amount (in $)
Sale for riding gear 77000
Opening stock 8000
Closing stock 10000
Purchase of stock 70900
COGS (opening stock + purchase - closing stock) 68900
Gross profit 8100
Add: receipts
Fees 660000
Subscriptions 32000
seminars 16500
show jumping events 55000
Vectare subsidy 15000
Tax refund 8000
Exempt income 7360
Advertising 5500
Net dividend 1400
Net dividend from UK 2000
Total 810860
Net wages 211000
PayG withheld 80000
Superannuation 28900
Rent 88000
Veterinary fees 22000
Donation 4440
Assets purchases 5500
Advertising 7900
legal 3 years lease 990
Fully franked dividend 80000
PAYG installments 50000
Fringe benefits tax paid 14700
Refund of fees 6600
Help paid for employee 4500
Car hiring 880
supplying uniform to staff 3960
Total expenses 609370

Net profit 201490
deductions
Tax loss carried over (Claiming tax losses from previous years, 2017) 32000
Input tax credit on purchase 4900
Net profit after deduction 164590
Tax payable @ 27.5% 45262.25
3.
From assessment, it has been identified that tax return covers financial year from 1 July
to 30th June. Hence, by accessing the website such as ato.gov.au Sapphire Stables Pty Ltd can
lodge tax return easily. Along with this, concerned authority or business unit can complete or file
a tax return before 31st October.
4.
Franking account
Debit
credi
t Balance (in $)
Balance forwarded 0
Tax refund 8000
Fully franked dividend 80000
PAYG installment payment 50000
dividend received on 1.4.17 which is 50% franked 700
13800
0 700
Debit balance (Franking account,2017) 137300
5.
Business Activity Statement
PAYGW 80000
PAYGI 50000
Fringe benefit tax (Business
activity statements (BAS), 2017) 14700

6.
Payments which are liable for fringe benefit tax
Entertaining staff
Airfares of staff (Types of fringe benefits, 2017)
Accommodation expenses of staff
Tax advise
7.
On the basis of ATO rules and regulations, penalty is imposed on corporate tax entities if
they failed to lodge return by the due date (Franking account tax return and instructions, 2017).
In addition to this, general interest charge is also imposed on entities if they fail to comply with
the aspect of frank dividend tax (Business activity statement, 2017). Along with this, penalties
are also imposed by taxation authority on companies or individual if business activity statement
is not presented before the due date.
8.

REFERENCES
Online
Business activity statement. 2017. [Online]. Available through:
<https://www.business.gov.au/new-to-business-essentials/series-two/business-activity-
statement>.
Business activity statements (BAS). 2017. [Online]. Available through:
<https://www.ato.gov.au/Business/Business-activity-statements-(BAS)/>.
Claiming tax losses from previous years. 2017. [Online]. Available through:
<https://www.ato.gov.au/Business/Income-and-deductions-for-business/Losses/Claiming-
tax-losses-from-previous-years/>.
Franking account tax return and instructions. 2017. [Online]. Available through:
<https://www.ato.gov.au/Forms/Franking-account-tax-return-and-instructions-2017/>.
Franking account. 2017. [Online]. Available through:
<https://www.ato.gov.au/Business/Imputation/Paying-dividends-and-other-distributions/
Franking-account/>.
Types of fringe benefits. 2017. [Online]. Available through:
<https://www.ato.gov.au/General/fringe-benefits-tax-(fbt)/types-of-fringe-benefits/>.