Trang is employed as a trainee accountant for a large retail firm, Miyer Ltd. The retail firm sells a selection of goods, including clothing wear and accessories. During the current fringe benefits tax year, Miyer Ltd provided the following items as part of a salary package:

(a)   A car, mainly used to drive her children to school. The car was purchased for $25,000 (including goods and services tax). During the year, the car travelled 15,000 km, of which 3,000 km was work related. Licence, insurance and services cost $2,200. Trang contributes $1,170 to cover the cost of petrol.

(b)   Miyer Ltd gave Trang a selection of designer clothes with a retail value of $6,500. The goods cost Miyer Ltd $4,900.

(c)   Paid for her mobile phone bill of $890. Trang estimated that 70% of the phone calls were used to call her relatives and friends.

Required:  

Advise Miyer Ltd of the fringe benefit tax and income tax implications that may arise in relation to each of the items provided to Trang. Please calculate the grossed up taxable value of each fringe benefit provided, and the total fringe benefits tax liability. You may assume all benefits were provided on 1 April 2023. Please support your answer with relevant case law and legislation and show any relevant calculations.

Answer rating: 100% (QA)

Benefit a Provision of a Car Fringe Benefit Tax FBT Implications The provision of a car to Trang for her childrens school transportation is considered ... View the full answer