Karen is employed by Tasmanian Timber Furniture as a salesperson, and she received the following benefits in
Question:
Karen is employed by Tasmanian Timber Furniture as a salesperson, and she received the following benefits in the 2020/21 FBT year:
Car
On 1 April 2020 Karen’s employer purchased a car that cost $59,000 and provided it to Karen for his use. Karen is allowed to take the car home at the end of each work day and there is no restriction on her use of the car for private purposes. Karen contributes $75 per month towards the car expenses. Karen determined that from when she started using the car on 1 April 2020 until 31 March 2021 the total kilometres travelled were 30,000 km (18,000 km of these were for business travel).
Tasmanian Timber Furniture incurred the following expenses (excluding depreciation) in relation to the car in the 2020/21 FBT year:
Petrol and oil $7,000
Registration $700
Insurance $1,200
School fees
Karen’s two children are enrolled at a local private school, and the total fees of $22,000 per year ($11,000 per child) are paid by Karen’s employer during the 2020/21 FBT year.
Required:
- Calculate the Fringe Benefits Tax liability of Karen’s employer in respect of these two benefits, assuming that they wish to legally pay the least amount of fringe benefits tax possible.
- Calculate the reportable fringe benefit amount (if any) that will be included on Karen’s 2020/21 payment summary.
Expert Answer:
