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# HI 6028 TAXATION LAW

## Introduction

The following project will critically discuss about taxation laws relating to fringe benefits which a employee receives under the employment of the following under a registered company. This paper will critically evaluate the fringe benefits that are to be received by a employee under this employment. For this purpose the project will compute fringe benefits that are to be received by employee under prescribed case study and situation. Fringe benefits are benefits which are received by a employee under his employment period as the employee are entitled to receive these benefits under the taxation law. Like other business organizations, the business organizations and individuals of Australia are required to pay taxes on their annual incomes at different levels of the government. The regulatory authority which determines the amount of payable taxes and collects the amount for government findings is the Australian Taxation Office. The collected taxes are utilized in the development of public services which as a result provides the contribution to the society along with the economic wealth distribution of the government. The assignment consists of the case study of the Charlie and shiny homes pvt ltd to extract the available outcomes of receiving fringe benefits along with the advices of taxation for Allan and Betty on the activities of taxation which includes income and expenditure. The last part of the assignment consists of the consequences of income tax along with the citation of relevant case law. Moreover, the assignment consists of the income tax implications along with the participant advice in the barter scheme of tax implications.

As per the above calculation of the fringe benefit under which it can be seen that the total taxable of the benefit is \$2,270 and this may be the fixed amount which the company would need to pay and work effectively.

## Question

### Income tax consequences

However, when it comes to the income tax results it calculates the entire amount of the individual incomes annually. After the calculation of the income of the individual there is a certain amount is being charged to that individual. Whereas, on the other had if the taxable amount is exceeded from the initial amount then it makes huge impacts for the persons who are paying the tax. For example; if Alan yearly income is \$ 24000 and he pay an amount of \$2400 in the entire year. The amount can be exceeded if the there is a change in his income. Then the rate will differ from the last amount and he will have to pay more in compared to the amount which he uses to pay. Similarly, while calculating the entire tax amount the employee those who calculate the amount have a segregated place where all the charges are being counted in terms of the individual taxes. Hence these are the consequence that is being faced when it comes to the income tax law.

#### Citing relevant case law

Income tax implications

If the couple would have been doing the business from beforehand and may had informed the government then there may have been a case under which the couple would have had to pay the taxes more than it is doing now (James, 2016). Relating to the previous case under which Allan got the fees which may not be under the taxation law of the UK government and this may be effective for the person in various ways through which it may need to be done as per the needs of the person in various ways possible.

When taken the hobbies and businesses into account, it can be inferred that the hobbies are generally tax deductible items which are specifically used for taxation purpose. On the other hand, gardening became an effective business for involving regular and systematic practices for earning money. In accordance with the given case between Adrien and Simon vs. FCT(1974), Simon seemed to have generated huge amount of money based on his hobby thereby fulfilling a perfect business purpose. Allan and Betty were liable to pay taxes at normal rates based on Australian income tax rate based on the income tax Assessment Act of 1997.Thus money that was collected using joining system fee by the couple by members of barter system having an easy income access thereby fulfilling income tax purpose.

### Advising the participants in the barter scheme of any income tax implications

Barter system provides an example of the exchange of the goods which are being provided to the other party in return of some other goods and in this way the system runs. Relating to the case under which it had been said that Allan swaps citrus in return of the oranges which the couple produces and in this way it can be said that there may be a tax implication in the system (Ferry et al. 2015) There may be no taxation under this as there is no monetary related things are taking place and this may not be take place in the work. According to the Income Tax Assessment Act of 1997, under Section 52, stated that the entire transaction of the barter system that matters to a taxable income in addition to the tax which are suggested including the GST amount in Australia. Similarly, it beneficial for the business owners to take the advice of the barter scheme in terms of the income tax as the expenses in the business can be less in comparison to the amount which they used to pay before applying taxation law. However, the other candidates who avail the barter scheme have the facility to proclaim the financial statement which will help to have good and healthy business in the future.

Similarly, Alan did not indulge himself in terms of the exchange products which include the tax that can be return after items are purchased. On the other hand, if Alan could have followed the barter scheme of the taxation then he could have easily got back the amount that he has paid while purchasing the products in the market. In other words, it can be said that the barter scheme of the taxation can help the participant any many ways such as; the tax return amount which they can avail through the taxation law in the end, along with that they can also avail the GST amount for every products. When it comes to the GST rates of the products and services it removes the extra taxes of the products and the participants just have to pay a certain percentage of the GST rate. This barter scheme helps the participants to invest their saved money in other products.

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