Questions- Taxation Planning
boss, Rachael Ward, has received a phone call from a new client,
Andrew Bentley. Andrew owns a franchise business ‘What’s
at Garden City Shopping Centre. Rachael understands Andrew is very
concerned as he has received a letter from the Tax Office questioning
some of his businesses’ past tax claims Rachael wants you to
prepare for a meeting with Andrew to gather further information about
the Tax Office request, as well as to scope out exactly what Andrew
would like advice about.
her brief conversation with Andrew, Rachael understands that the
issues include superannuation guarantee payment, fringe benefits tax
treatment for the payment of educational expenses and payments to
Andrew’s wife’s corporation for design services.
Email from client
What’s Cook’n: ATO Letter
Hi, I am
looking forward to receiving your letter of advice as I am very
concerned about the letter I received from the ATO. I can’t believe
that my previous tax advisor got it so wrong – this is the last
thing I need when money is tight!
asked me to forward to you the letter from the ATO in preparation for
your letter of advice – see below. The What’s Cook’n business
is operated through a company, What’s Cook’n Pty Ltd, with the
shareholders myself and Mary – 50% each.
terms of your letter of advice I particularly want advice about the
various ‘tax issues’ that are raised in the ATO’s letter and
what we should do in preparation of the ATO’s visit. Also, it would
be beneficial for the advice to cover my family (myself, Mary and
Emma) as well as it seems the ATO has it in for them.
must admit that I am a bit confused about issues around employment,
as while I previously operated a tile business this had no employees.
So as you could appreciate I am a bit in the dark about the issues
that arise around employing people and the obligations that this may
received from the Tax Office.
Dear Mr Bentley
We refer to our
telephone conversation on 1 March 2020. We will be visiting you
on 8 May 2020 to discuss some of the claims that your company, What’s
Cook’n Pty Ltd, made in its Income Tax Returns for the years ended
30 June 2018 and 30 June 2019.
would like to discuss the following issues with you and would
appreciate if you had all the necessary books and documents with you.
understand that What’s Cook’n Pty Ltd employs a number of staff
in your store. We have been notified that not all employees in
your business have had sufficient superannuation contributions made
to their nominated superannuation funds. We would also like to
review your payments to employees to determine if What’s Cook’n
Pty Ltd’s PAYG has been correctly reported on its BAS statements.
We have also noticed that not all amounts reported have been paid to
to Mr Bentley and his family members
would like to review any payments or benefits that are provided by
What’s Cook’n Pty Ltd to Mr Bentley and his spouse and child by
being able to ask your
client questions is an important skill in providing clients correct
taxation advice. Looking at the
you need to formulate
relevant questions seeking further facts from your client to assist
in giving them tax advice.
state the question
explain the purpose of the question and
note the relevant law that relates to the question.
question should be approximately 200 words – giving a total of a
1,000 words for the five questions. See
the template and example below:
could you please tell me …[insert
need to know this because …[insert
brief reason for your question]…”
[Also, note the relevant
law that relates to the question: While this would not normally be
told directly to the client it is worthwhile noting it here]”
could you please tell me if any of your staff working are less than
18 years of age. The reason I ask that is that you are generally only
obliged to pay superannuation guarantee for staff less than 18 years
of age if they work 30 hours or more in a week and they receive $450
per month or more.
Guarantee (Administration) Act 1992,
28 and 6(1).
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