Business Tax Liability

Jason Day is the sole shareholder and employee of Jasons Plumbing Limited. For the income tax year ended 31 March 2022, his business income from plumbing services was $250,000. The cost of material and other business costs totalled $85,000. In addition, Jason drew a salary of $90,000 from the business for which the appropriate taxes were paid by the company.

1. Briefly explain the difference between the assessable income and the taxable income of a business.

2. Calculate the taxable income and basic income tax liability for Jasons Plumbing Limited for the income year ending 31 March 2022. Show all workings.