Question
Trendy Ltd is a manufacturer of casual clothing. The following were benefits provided by the company to its employees in the current FBT year. Emma
Trendy Ltd is a manufacturer of casual clothing. The following were benefits provided by the company to its employees in the current FBT year. Emma is a factory supervisor. She received relocation allowance of $5,000.
Ana is a factory worker. Factory workers have a right to purchase up to $1,200 of clothing manufactured by the company at cost price of material. Ana has purchased clothing to that limit. The lowest and the highest wholesale price of these goods are $2,400 and $3,000 respectively. The factory only sells to wholesalers and not to the public.
Dan is a marketing manager. A copy of the Financial Review newspaper was provided daily to help Dan track market trends. The cost of this was $15 per week and was provided for 24 weeks.
Chloe is a director of the company. The company met the interest payments on her $100,000 housing loan of $10,000.
Benedict is a tax accountant. He has sole use of a company-owned car which is garaged at his place of residence. During the current FBT year, he travelled a total of 45,000 km, 12,000 km of which were for private purposes. The motor vehicle originally cost the company $26,400 when it was provided to Benedict on 17 October of the current FBT year. He did not contribute to the running costs.
Required:
Calculate fringe benefits tax that Trendy Ltd is liable for in respect of the above arrangements during the current FBT year. Justify and support your answer with reference to relevant fringe benefits tax legislation.
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