Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed

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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing The Procurement Function The Iia Research Foundation Handbook Series

Authors: David O Regan, CIA, FCA

1st Edition

0894136224, 978-0894136221

More Books

Students also viewed these Accounting questions

Question

What are the main objectives of Inventory ?

Answered: 1 week ago

Question

Explain the various inventory management techniques in detail.

Answered: 1 week ago

Question

Evaluate employees readiness for training. page 275

Answered: 1 week ago