Scott is a livestock auctioneer employed by Auctions R Us Pty Ltd and is required to do
Question:
Scott is a livestock auctioneer employed by Auctions R Us Pty Ltd and is required to do a lot of travelling for work.
He was therefore provided with a car by his employer during the FBT year ended 31 March 2020.
The car was purchased by the company on 1 October 2019 for $46,700 (GST inclusive) and was made available to Scott to keep on his premises when not in use. As part of the arrangement, Scott was required to contribute to the fuel costs as he sometimes travelled out of town to visit family which amount to approximately 30% of car use. His total contribution amounted of $2,000 for the year.
Using the sasatutory formula method, what would be the FBT payable by Auctions R Us Pyt Ltd for the year ended 3 MArch 2020 (to the nearest dollar)? What would be the advantages to Auctions R Us Pty Ltd in using the satutory formula method over the actual cost method?