Mark Peters operates a cabinet making business as a sole trader. He manufactures and installs kitchen and other home renovations for his clients. He is known for his bespoke work and regularly imports in quality materials from overseas that are not normally available in Australia. He also employs several staff to assist him. He has asked for your assistance in completing his March 2021 Business Activity Statement. He is registered for GST on an accruals basis. To assist you, he has provided you with the following information.

Assume that there are 13 weeks in the March 2021 quarter.

Business Activity Statement information

Mark had previously provided one of his former staff with a motor vehicle for which FBT was being paid. The FBT was being calculated using the operating cost method and had a business use of 70%. The staff member left on 30th Dec 2020 and no other employees have been using the car since. The ATO currently have Mark paying FBT instalments of $1000/quarter. Mark would like you to consider if this still has to be paid given that the motor vehicle is now sold. The ATO have also advised Mark that he has a personal PAYGI of $13,450/quarter. He has chosen to used the fixed ATO amount to pay his PAYGI. There are no liabilities for WET, LCT or FTC All amounts are GST inclusive unless otherwise stated.

Required

Provide a brief general explanation of when Mark would need to charge GST and when he would be able to claim input taxed credits. References are required.

Cash receipts for the March 2021 quarter Customer receipts from Dec 2020 sales $77,000 Other customer receipts $567,000 Bank interest received $100 Sale of a motor vehicle being used by a former staff member $8,800 (sold 1 Jan 2021). Job keeper Government payment $5,000 In addition, Mark has invoiced $11,000 to a client on 4th March 2021 which is not due to be received until April 2021. Cash payments for the March 2021 quarter Wood and other materials purchased in Australia $230,000 Payments for materials received in Dec 2020 $5,500 lian imported marble (amount paid to Italian company) ** E10,000 (assume exchange rate of $A1=E0.6 Freight charges for marble $550 Motor vehicle fuel for personal vehicle used by Mark (not used $2,200 in the business) First aid course for staff $100 Milk for the warehouse for coffees etc $50 New equipment purchases via loan on 1st March 2021 $55,000 First repayment of the equipment loan $450 Yearly staff function at a local restaurant ($220/head) $1,100 Personal drawings taken from the business by Mark for personal $30,000 living expenses In addition, Mark has invoices to suppliers to pay of $22,000 which will be paid in April 2021. *The local restaurant function would be considered minor and infrequent and be considered entertainment for the purposes of income tax, hence not tax deductible. ** The Italian company did not charge GST on the marble. The Australian freight company did charge GST. Salary and Wages Mark has 5 staff members. They are paid weekly and all employees are entitled to the tax-free threshold. Wage details for each of the staff are Mike (permanent staff member) $60,000 pa Helen (permanent staff member) $55,000 pa Joe (apprentice who started 17th March 2021) $30,000 pa Lionel (casual who worked 10/hrs per week from $40/hr gth Jan 2021) Nicole (casual who worked 3/hrs per month) $40/hr