11:45 9 65 E studocu Q & V TAX228 - Term Test 2 ... Question 1 (40 Marks) You are an article clerk, employed in the tax department of ABC Auditors. On 30 June 2021, your audit partner handed you the file of Dr BJ Botha. The file consists of financial statements, various notes as well as tax and legal documents. The partner asked you to carefully read through the various documents and to formulate your reply to the queries of Dr Botha. Dr BJ Botha is a well-known cardiothoracic surgeon for the changes he has implemented to performing surgery using robotics. He is also the grandson of the well-known Professor Christiaan Barnard who performed the first heart transplant at Groote Schuur Hospital. He is the sole owner of Botha's Medical (Pty) Ltd which is a private practice specialising in performing surgery on the heart, lungs, and other thoracic structures. Botha's Medical employs 5 full-time employees, 3 qualified doctors (including Dr Botha), and 2 employees, one as the receptionist and Mandy the wife of Dr Botha who is the operations manager. Botha's Medical is a South African resident company. The company has a March year-end. The Botha family are all residents for South African tax purposes, except where specifically stated otherwise 1. Query 1 - Mandy Botha - PAYE Mandy is the wife of Dr Botha. She worked in his practice in which she earned income and made contributions and payments for the month of December 2021, as indicated below. Mandy is 48 years old. She is employed by Botha's Medical as an operations manager. The following information was extracted from her employment contract and her December 2021 payslip. Details Note Rand Salary 40,400 Travel allowance 2 5,000 Christmas bonus 50,000 Pension fund contributions 3 (3,600) Retirement annuity fund contributions (600) Payment to Bank for bond 2,000) Medical fund contributions (3,215) Notes: 1. At the end of December 2021, Mandy is entitled to 5 days leave. She needs to take this leave before the end of March 2022. If she does not take the leave by then, Botha's Medical will pay her out R1,600 x 5 days = R8,000 on 31 March 2022. 2. All of 10,000 km's travelled by Mandy was for business purposes. 3. Mandy belongs to her employer's pension fund. She contributed R3,600 to the pension fund during December. Her employer contributed an equal amount. 4. Mandy has an agreement with her employer that they will deduct R2,000 from her salary each month and pay it directly into her home loan account. 5. Mandy contributes R3,215 to a medical aid fund each month. She is the only member on her medical aid. Her employer contributes R2,000 per month to the fund. During December 2021 she visited the doctor once and had to pay a levy of R300 which was not covered by her medical aid. Her prescribed medicines amounted to R800 of which the medical aid paid R730 Other information Mandy makes RAF contributions of R600 per month. She has not informed her employer of these contributions. 3 AA studocu.com C= studocu Q 2 TAX228 - Term Test 2 ... : k] Bothas Medical (Pty) Ltd is having a SARS audit. Please could you assist me with the employees' tax that was supposed to be withheld for Mandy. This information is normally needed when completing the EMP201 and EMP501. Alse, please could you assist me what amount should be deposited into Mandy's account. This will ensure that we are paying the correct amount and can trace the amount to the bank statements. 2. Query 2 - David Botha David is 32 years old and the younger brother of Dr Botha. David Botha is a qualified chemical engineer. He is salaried employee but also has a consulting company which he uses to earn extra income. He is married to Teboho. Both their children are at primary school. David supplies you with the following information of what happened and the information which was available on each of the dates as indicated below: Dates Details Received the assessment for the 2020 year of assessment: Figures from the ITA34: s Taxable income: R1,050,732 (excluding any receipts from a capital nature) + PAYE:R307,808.12 s Provisional tax credits: R9,000 Estimated taxable income: R1,100,000 Employees' tax paid (1 March 2021 - 31 August 2021): R125,782.60 30 September 2021 Actual taxable income for 2021 year of assessment: R989,552 Submitted the return (and was assessed on 17 February 2022) for 2021 year of assessment. Figures from ITA34: 31 January 2022 s Taxable income: R989,552 (excluding any receipts from a capital nature) * PAYE:R272,529.20 * Provisional tax credits: R10,943.84 Estimated taxable income R1,108,368 (an accurate amount) Employees' tax paid for the 2022 year of assessment: R263,659 Medical fund contributions: As from 1 January 2021 - R10,889 per month for herself, her husband and twao children. Taxable capital gain: R118 459 on sale of shares on 31 January 2022 31 January 2021 31 August 2021 28 February 2022 (included in estimated taxable income) On Freedom Day, Dr Botha invited David and his family over for a braoi. David complained about the administrative burden of completing provisional tax payments and stated that it is complicated to understand. Please could you respond to Dr Botha breoking up what the First & Provisional tax payment would be based on the information above. PSIl! Please do not forget to ask who will be covering the bill for time spent on this query @ studocu.com = studocu ++ 2] > TAX228 - Term Test 2 ... + REQUIRED Marks Show all your calculations and round off to the nearest Rand. Question 1 - IGNORE VAT 1.1 Calculate the employees' tax to be withheld for the month of December 2021 for 20 Mandy. 1.2 Calculate the amount that would be deposited in Mandy's Bank account on 23 5 December 2021 by Botha's Medical. 1.3 Calculate David's first and second provisional tax payments which takes place in 15 the 2022 year of assessment, clearly indicating the relevant dates. Provide reasons for the amounts used to calculate each payment. NBI!!l David does not want to pay any penalties or interest but wants to pay the least amount of tax payable with each payment. TOTAL MARKS 40 Home My Library Discovery Ask Al Chats @ studocu.com 11:469 65 E studocu Q & V TAX228 - Term Test 2 ... 2 Question 1 (40 Marks) You are an article clerk, employed in the tax department of ABC Auditors. On 30 June 2021, your audit partner handed you the file of Dr BJ Botha. The file consists of financial statements, various notes as well as tax and legal documents. The partner asked you to carefully read through the various documents and to formulate your reply to the queries of Dr Botha. Dr BJ Botha is a well-known cardiothoracic surgeon for the changes he has implemented to performing surgery using robotics. He is also the grandson of the well-known Professor Christiaan Barnard who performed the first heart transplant at Groote Schuur Hospital. He is the sole owner of Botha's Medical (Pty) Ltd which is a private practice specialising in performing surgery on the heart, lungs, and other thoracic structures. Botha's Medical employs 5 full-time employees, 3 qualified doctors (including Dr Botha), and 2 employees, one as the receptionist and Mandy the wife of Dr Botha who is the operations manager. Botha's Medical is a South African resident company. The company has a March year-end. The Botha family are all residents for South African tax purposes, except where specifically stated otherwise. 1. Query 1 - Mandy Botha - PAYE Mandy is the wife of Dr Botha. She worked in his practice in which she earned income and made contributions and payments for the month of December 2021, as indicated below. Mandy is 48 years old. She is employed by Botha's Medical as an operations manager. The following information was sutrastad from har amalsumant contract and har December 20131 mauelin Q Home My Library Discovery Ask Al Chats AA studocu.com