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You are the tax advisor for June Smith who has started a business that arranges accommodation for foreign students coming to New Zealand. For the
You are the tax advisor for June Smith who has started a business that arranges accommodation for foreign students coming to New Zealand. For the first two years, the business has made losses but in the year to 31 March 2017, the company made a profit of $40,000 which absorbed the prior years' losses and resulted in a tax liability of S3,700. The business is set to continue making profits in the year to 31 March 2018. a) Advise June on the choice of methods she could use to satisfy her income tax liability for the year to 31 March 2018. Recommend one method (justify your recommendation (5 points) Calculate the amounts of income tax due and the dates they will fall due, (4 points) b) following your recommendation in a). c) Explain to June the consequences of not paying her income tax on time or in the correct amounts. (5 points) d)During the 2018 tax year, June gets so busy she needs to employ some assistance. She employs a student, Shane, from Massey University to work 15 hours per week for her. Briefly outline for June her tax obligations as a result of employing Shane. (5 points) e) Shane suggests to June that she just pay him without deduction of tax as split the tax saving between them so they're both ahead. Advise June of (6 points) he is a poor student and needs the extra money. He suggests they just the consequences for her of doing this if she is found out by the IRD
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