The purpose of this assessment is for you to demonstrate your ability to: access, interpret and comply with ATO requirements, assess and identify taxation requirements for complex lodgements and returns, gather and analyse complex taxation related data, process and prepare tax returns and lodgements, review taxation lodgement compliance.
These questions address the elements of competency for the units FNSACC401A Process Business Tax Requirements and FNSBKG404A Carry out Business Activity and Instalment Activity Tasks as listed below:
The assessment will be in the form of a written test. The required answers should be provided on the electronic copy of the assessment which will be uploaded to moodle on the day of the examination. The time allotted for the examination will be 3 hours. Please attempt all questions and submit your examination by email after completing the examination. The examination will be an open book exam. The questions will be a combination of short answers and practical tasks. Once assessment has commenced, no communication between students is allowed.
If students repeatedly talk, or are caught cheating, they are to be removed from the classroom, and reported to student administration. Mark the assessment tasks as “incomplete”
No students are to leave the classroom within 15 minutes of commencement of the assessment.
Multiple choice questions: Select the most appropriate answer.
Multiple choice questions:
1.If a business that has purchased taxable supplies cannot obtain an ABN from the seller tax will be deducted at source by the purchasing business at the rate of:
a.10.0%
b.20.0%
c.30.0%
d.46.5%
2.If tax is deducted at source by Company X because a tax invoice has not been provided by Company Y, then the amount actually paid to Company Y is:
a.Noted in the BAS as GST-free
b.Noted in the BAS as input-taxed
c.Noted in the BAS under PAYG Withholding section
d.Not reported in the BAS at all.
3.Which of the following fringe benefits would be grossed-up using the type 2 factor of 1.8868 for the FBT year 2014-15?
a.Foreign travel expenses reimbursed by employer.
b.Use of Motorvehicle purchased on 1/8/2013.
c.Amounts paid for employee private telephone expenses
d.Benefits derived from private use of motor vehicle purchased in 1997.
4.The threshold for trading enterprises to register for GST is:
a.$75,000
b.$2 million
c.$20 million
d.$100,000
5.For businesses wishing to use the cash basis to account for GST, the threshold is:
a.$75,000
b.$2 million
c.$20 million
d.$100,000
6.The superannuation guarantee levy aims to:
a.Lower the foreign debt
b.Increase government revenue
c.Provide funds for investment
d.Provide support benefit for employees.
7.Which of the following is optional under the PAYG withholding system?
a.Registration on commencement of business if employing people
b.Preparation of payment summary for an employee who has not had tax withheld
c.Completion of a TFN declaration by an employee
d.None of the above; all are actual requirements of the PAYG withholding system.
8.If a single taxpayer, with no private health cover for any part of the year 2014-15, has wages of $ 75,000, other assessable income of $25,000, reportable fringe benefits of $10,000 general deductions allowed $5,000 and PAYG withheld of $8500, the Medicare levy surcharge will be:
a.$1050.00
b.$1850.00
c.$2125.00
d.$1275.00
9.Which of the following people do not require a TFN?
a.A non-resident earning rental income in Australia
b.A school student aged 15 earning part- time employment income
c.A pensioner in receipt of the age pension
d.A child aged 10 who is in receipt of $200 in bank interest only.
10.The tax-free threshold for individuals who are Australian residents for tax purpose for the year 2015-16 is:
a.$19,200
b.$18,200
c.$18,500
d.$20,500.
The Australian Government, from time to time, releases the correct pieces of information on their website and through published books regarding the topic of professional and legislative requirements related to activity statements. Any tax payer or assessee can simply increase his knowledge through the issued laws by the Australian Taxation Office, or ATO in short.
In addition to that, the certified public accuntants are also a great means of procuring the right sort of knowledge about any sort of developments in the fields of activity statements (with context to professional and legislative requirements).
One can also read the different taxation and financial magazines which private sector companies publish from time to time, in order to be updated about the stated subject.
There are three ways in which GST can be reposted and paid. They are monthly, quarterly and annually.
PAYG stands for Pay as You Go where the end objective of the PAYG system is to ensure the smooth collection of taxes against income throughout the year, from different entities. The two limbs of PAYG are PAYG Withholdings and PAYG Installments.
Under PAYG withholdings, the employers are entitled to put to application, in order to achieve the objective of assisting their employees to meet ends with year-end tax liabilities. These can be done for principles equivalent to employees, contractors and business-houses that do not use their ABN (Australian Business Number). Under PAYG Installments, it leads to self-regulated timely payment of taxes on business income to the ATO by individuals or busienss houses, on their own.
To wind up plainly an enlisted BAS specialist, singular candidates must fulfill certain capabilities and experience necessities, which are set out in the Tax Agent Services Regulations 2009 (TASR).
Membership of expert affiliation
(i)What is the last date for lodgement of returns.
There are different lodgement dates for returns for different entities. While it is 30th October, 2016 for all the individuals and trusts, it was 15th January, 2017 for medium and large trusts.
(ii)What is a FTL penalty?
FTL penalty stands for Failure to Lodge penalty which tantamount to the penalty imposed by the ATO when the returns are not lodged within the due date.
(iii)What is the current per unit penalty amount?
Foe a small concern, it is one unit; while for a medium and large business organization, it is two and five units respectively.
(iv)What documents does an FTL penalty apply to?
The following documents are highlighted on which FTL penalty is applied on:
Case scenarios:
At the outset, it is humbly saddening when a tax agent provides us with incorrect information or a bad advice which leads us to having penalties. After all, the sole purpose of walking into a tax consultant’s office is to procure the right sort of information, so that we correctly pay the right amount of due tax to the Australian Taxation Office without being engulfed in the guilt of penalties
The TPB can also decide if it is a dissension, they can follow up on with respect to the inquiry. Moreover, they can direct a formal examination, where required, to decide if a rupture of the TASA, including the Code of Professional Conduct (Code), has happened. The TPB is also liable to furnish the complainant with as much data as they legitimately can procure about the result of the complainant’s grievance. They may force a regulatory endorse in the event that we find that the professional has ruptured the Code or we may apply to the Federal Court for a punishment or order.
An existing client approaches you in early November stating that the income tax return of a friend has not been prepared or lodged for the previous financial year. Your client is aware that the tax agents can lodge later than the October 31 deadline so requests that you assist the friend and prepare and lodge the tax return to avoid penalties.
Under the Code of Professional Conduct, what advice do you provide to your client to pass on to the friend? Discuss in 100 to 120 words.
In the current scenario, we see that an existing client has approached me in early November stating that the income tax return of a friend has not been prepared or ledged for the previous financial year. Under the Code of Proffesional Conduct, I am liable not to disclose any information about the preparation and lodging of tax returns of the client’s friend to the friend. Moreover, Code Item 6 states that:
‘Unless you have a legal duty to do so, you must not disclose any information relating to a client’s affairs to a third party without your client’s permission.’
Therefore, I will ask my client to advice the friend to not disclose any information regarding his books of accounts, and lodging of returns.
Practical:
WET = 29% of $1500 = $435
GST = 12.9% of $1500 = $193.50
Therefore, total price = $(1500 + 435 + 193.50) = $2128.50
Yes. Sicne the trader is registered to pay GST, the sale of the car will be subject to LCT. Moreover, the value of the car is over and above the LCT threshold worth $75,375 for a fuel-efficient car, purhcased or sold after 31st October, 2008.
LCT Value = $99,000 – $75,375 x 10/11 = $23625 x 10/11 = $21,477.27
LCT = 33% of $21,477.27 = $7,087.50
The Label on BAS will be 1E.
The new Sale Price will be $99,000 + $7,087.50 = $106,087.50
References
ATO. (2017). Luxury car tax rate and thresholds. Retrieved June 1, 2017, from https://www.ato.gov.au/rates/luxury-car-tax-rate-and-thresholds/
The Treasury. (2015, August 01). Wine equalisation tax rebate. Retrieved June 1, 2017, from https://treasury.gov.au/~/media/Treasury/Consultations%20and%20Reviews/Consultations/2015/Wine%20Equalisation%20Tax%20Rebate/Key%20Documents/PDF/WET_Rebate_Discussion_Paper_2015.ashx
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