University Taxation Law Assignment: Payroll, GST, and Income Tax

This Taxation Law assignment addresses several key areas of Australian taxation. It begins with the computation of a payroll schedule and the calculation of an employer's statutory Superannuation Guarantee obligations. The assignment then delves into the classification of income, distinguishing between ordinary and assessable income, citing relevant sections of the ITAA 1997 and legal precedents like Scott v Commissioner of Taxation (1935). The analysis includes income from training payments, customer share of prizes on horses, and the trade-in of a tractor. Furthermore, the assignment covers permissible deductions for expenses such as horse feed, veterinary fees, and accommodation costs, referencing Ronpibon Nil NL v FCT (1949). The document also discusses GST credits and creditable acquisitions, as defined by section 11-5 of the ITAA 1997. Finally, the assignment concludes with a BLANK BAS FIELDS OPTION 1, outlining the calculation and reporting of GST on sales and purchases, PAYG, and other relevant financial figures, as well as the FBT instalment. The solution provides a detailed breakdown of each aspect, including the application of relevant tax laws and case precedents.

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

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Table of Contents
Answer to question A:................................................................................................................2
Answer to question B:................................................................................................................2
Answer to question C:................................................................................................................3
Answer to question D:................................................................................................................4
Answer to question E:................................................................................................................5
References:.................................................................................................................................8

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Answer to question A:
Computation of Payroll Schedule:
Employee Name Weekly Wages / Salary Weekly PayG Quarterly Wages/Salary Quarterly PayG
Kris 120 25 1560 325
Sam 220 49 2860 637
Sarah 4000 1528 52000 19864
Lauren 1440 458 18720 5954
Marty 5600 2280 72800 29640
Paul 2200 755 28600 9815
Schedule of Payroll Information
Employee Name Kris Sam
Week 1 120 220
Week 2 105 220
Week 3 150 330
Week 4 180 330
Week 5 0 220
Week 6 0 220
Week 7 75 330
Week 8 180 330
Week 9 150 220
Week 10 180 220
Week 11 120 330
Week 12 120 220
Week 13 120 0
Total Wages 1500 3190
Payroll Information
Answer to question B:
Calculation of employer’s statutory Superannuation Guarantee obligations:
Employee Name Super Fund Name Ordinary time earnings SG rate SG Contributions
Kris State Super Retirement Fund 1500 9.50% 142.5
Sam State Super Retirement Fund 3190 9.50% 303.05
Sarah State Super Retirement Fund 4000 9.50% 380
Lauren State Super Retirement Fund 1440 9.50% 136.8
Marty State Super Retirement Fund 5600 9.50% 532
Paul State Super Retirement Fund 2200 9.50% 209
1703.35Toal Employers Contributions
Superannuation Guarantee Obligations

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Answer to question C:
Item Value Supply Type GST Input tax Credit ($) GST Exclusive Value ($)
Assesssable Receipts
Training Fees 82698 Financial Sales 7518 75180
Share of prize money from customers horses 55000 Financial Sales 5000 50000
Prize money from Bronny horses 16500 Financial Sales 1500 15000
Trophy from Brisbane Cup 1200 Financial Sales 109.09 1090.91
Trade in tractor 1900 Financial Sales 172.73 1727.27
Total Receipts 157298 14299.82
Expenses Eligible as Deductions
Horse Feed 8800 Input Tax Sales 800 8000
Veterinary Fees 7700 Input Tax Sales 700 7000
Ferrier 5500 Input Tax Sales 5500
Accomodation for Staff 2475 Input Tax Sales 225 2250
Airfares for staff 5346 Input Tax Sales 486 4860
Bookkeeping services 2640 Input Tax Sales 240 2400
First Aid courses for staff members 990 Input Tax Sales 90 900
Cost of Goods Sold 4500 Imported Goods 409 4091
Freight 250 Imported Goods 23 227
Business loan 750 Input Tax Sales 750
Total Allowable Deductions 38951 2972.818182
Net Income from business 118347
Total GST Payable 11327.00
As defined under the “section 6-5, ITAA 1997” majority of income that is earned by
the taxpayer is regarded as the ordinary income. The court of law in “Scott v Commissioner
of Taxation (1935)” held that the receipts derived during the ordinary business should be
ascertained based on the ordinary meaning of the act (Woellner et al. 2016). Similarly,
“section 995-1 of the ITAA 1997” defines business as anything that comprises of trade,
profession or business activities but does not comprises of occupation in the capacity of
employee. Business that are registered under GST and selling any goods or service within the
geographical boundaries of Australia would be liable for the GST at a rate of 10% unless the
supply is free from GST-input tax.
Receipts from training payments were reported by Brian during the income year of
2018. Referring to “section 6-5 of the ITAA 1997” the receipts from training fees would be
classified as ordinary business receipts and will be considered assessable as ordinary income.
He also furnished information regarding the receipts from customer share of prizes on horses.
As held in “Moore v Griffiths (1972)” mere prize winnings are not treated as income unless
the taxpayer is involved in the income generating activities (Robin 2017). Similarly the

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receipts from the customer share of prizes from horses as well as winnings from the Bronny
Park would be treated as taxable earnings as it originated from the daily business activities of
Brian.
Receipts from the trade-in of tractor that was earlier used on the property is treated as
income. Citing the event of “Scott v Commissioner of Taxation 1935” the receipts forms the
part of ordinary business course and hence the sum of $19,000 has been included for
assessment purpose.
As defined under the “section 8-1 of the ITAA 1997” a taxpayer that incurs
expenditure in the form of outgoing while producing the taxable will be treated as permissible
deductions. Expenses were reported by Brian on horse feed, veterinary fees. Citing
“Ronpibon Nil NL v FCT (1949)” expenses that are relevant and incidental to taxpayer’s
revenue producing activities are allowed for deduction (Blakelock and King 2017). Similarly
the horse feed and veterinary fees are relevant and incidental business costs. Brian also incurs
expenses on accommodation for race staff and farrier. Under the general provision of
“section 8-1 of the ITAA 1997” the expenses are allowed as deductions.
Later an unused part of total airfares was reported by Brian where one of his staff did
not attended the meeting. The sum of $1100 has been excluded from the total deduction while
the left over airfares are considered for deduction purpose. Brian imported saddles and leather
goods from Europe which were exclusive for GST. However, an equivalent amount of 10%
has been charged on the imported saddles and leather goods.
Answer to question D:
Conditions required to claim GST credits is listed below;
a. The intention of the taxpayer was to completely or partially use the purchase for
business purpose and the purchase is not related to the creation of input tax supplies.

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b. GST is included in the purchase price
c. The taxpayer has tax invoice from the supplier
d. The taxpayer is accountable for providing payment for the goods that is bought
As per “section 11-5, ITAA 1997” creditable refers to things which is acquired by the
taxpayer completely for creditable purpose and supplies constitute a taxable supply for
creditable purpose (Burton 2017). The acquisitions such as horse feed, veterinary fees, new
tractor, bookkeeping fees, saddles and leather goods made by Brian from Europe will be
treated as the creditable acquisition. These purchases were made wholly for the creditable
purpose.
Answer to question E:
BLANK BAS FIELDS
OPTION 1: Calculate GST & report quarterly SUMMARY
1A GST on Sales $-
G1 Total Sales $1,57,298- 1C WET $-
Does G1 include GST Y/N 1E LCT $-
G2 Export Sales $- 4 PAYG Withheld $66,235-
G3 Other GST-Free Sales $- 5A PAYG income tax instalment $16,790-
G10 Capital Purchases $- 6A FBT instalment $-
G11 Non-capital Purchases $- 7C FTC over claim $-
8A $-
PAYG tax withheld
1B GST on purchases $-
W1 Total Salary & Wages $1,76,540- 1D WET refundable $-
W2 Amount Withheld $- 1F LCT refundable $-
W4 No ABN $- 5B PAYG instalment credit $-
W3 Other amount $- 6B FBT credit $-
W5 total amounts withheld $- 7D FTC credit $-
8B $-
OPTION 1: Pay a PAYG instalment amount quarterly
PAYMENT OR REFUND
T7 $66,235-
Is 8A more than 8B? YES/NO
FBT INSTALMENT
Your payment amount $-
F1 $-

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F2 Est FBT for year $2,500-
F3 Varied amount payable $-
F4 Variation Code

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References:
Blakelock, S. and King, P., 2017. Taxation law: The advance of ATO data
matching. Proctor, The, 37(6), p.18.
Burton, M., 2017. A Review of Judicial References to the Dictum of Jordan CJ, Expressed in
Scott v. Commissioner of Taxation, in Elaborating the Meaning of Income for the Purposes
of the Australian Income Tax. J. Austl. Tax'n, 19, p.50.
Robin, H., 2017. Australian taxation law 2017. Oxford University Press.
Woellner, R., Barkoczy, S., Murphy, S., Evans, C. and Pinto, D., 2016. Australian Taxation
Law 2016. OUP Catalogue.