This part of the assignment will mainly deal with issues concerning allowable deductions, but you should be aware that there may be some income issues from topics that were not completed prior to assignment part 1. It comprises 27% of the assessment for this course. While the word limit is 1,500 words, please write what is necessary to address the task that you are requested to do, however you are requested to not excessively exceed that limit. In other words, strive to be concise and confine yourself to discussion that directly addresses the tax issues raised.
ACCT 3002 Taxation Law Assignment-South Australia University.
In completing this task, please follow the instructions in this document. If you have any questions about these instructions, including concerns about word limits, please ask.
A synopsis, executive summary or introduction is not required. Simply address the tax issues raised in the information provided in the order they are raised, each under a separate heading. A reference list is not required either.
In accordance with the University’s graduate qualities and the business school’s enterprise skills, this part of the assignment is offered to promote the development of advanced problem-solving skills and written communication skills.
Although basic calculations are required, do not treat this as an accounting exercise.Always remember that your answers should be supported by reference to relevant taxation law using the ‘cite, describe, apply’ method. You should only cite, describe and apply relevant cases and/or sections from the course materials in your answer.Materials other than sections and cases are provided to help you understand the law,but they do not substitute for the law itself.
ACCT 3002 Taxation Law Assignment-South Australia University.
This part of the assignment may be undertaken on an individual basis or as a team of TWO or THREE students. The maximum size of the team is not negotiable. It is the responsibility of students to organise their own teams. A student cannot be a member of more than one team. Students are strongly advised to form teams wherever possible. If this part of the assignment has been completed as a team, please submit one assignment per team. Marked assignments will be returned to the person who submitted it.
There is no limitation on who may form a team. Thus, teams may comprise students from different tutorials and the teams may be different from assignment Part One.Teams may also comprise internal and external students. All submissions, whether they are completed by individuals or teams, will be marked the same way. Your decision regarding whether to work in a team or individually ought to be based on your own preferences and the availability of suitable team members.
All members of the team must sign the plagiarism declaration. By signing the plagiarism declaration, you are deemed to have full knowledge of the contents of the whole assignment and the sources from which the contents were derived and you acknowledge that you have referenced all material from other sources.
All students named in a team are deemed jointly and severally responsible for academic misconduct in relation to any such assignment.
Submission must be via Learn online. Submissions by email will not be accepted.
An extension of time for submission of any part of an assignment will not be granted unless approval has been obtained from the course coordinator before the due date of the assignment. Late submissions will be penalised 10% of the total marks for each day or part day late (including weekends). An extension will only be granted in exceptional circumstances supported by documentary evidence submitted to the course coordinator before the due date of the assignment. For an extension request to be considered, a copy of the work completed on the assignment to the date of the request must accompany it. Please request extensions through Learn online.
Assessment Criteria
Assessment of your assignments will take into account your or your team’s ability to establish a reasonably argued position with respect to the tax issues raised in the assignment using the ‘cite, describe, apply’ method. Refer to the discussion about reasonably arguable positions and how to answer tax questions in the study notes and the introductory week video (don’t forget that there is also discussion about this in the preliminary matters and at the end of each topic).
In using the ‘cite, describe, apply’ method ensure that you or your team:
- Identify all tax issues.
- Cite, describe and apply the most directly relevant law to the tax issues raised on the assignment.
- State a clear and definite conclusion that is consistent with the way you or your team applied the law to the facts.
- If you are unsure about this approach, then refer to lecture examples.
- Consider the overall presentation including correct grammar, spelling and punctuation and clarity of expression.
- Adopt the required layout (refer below).
ACCT 3002 Taxation Law Assignment-South Australia University.
Format/expectations for assignments
Written assignments primarily assess the practical application of important provisions of income tax and associated legislation and case law. With respect to format, address each tax issue under a separate heading using the ‘cite, describe, apply’ method and provide a calculation at the end. Do not waste valuable words on introductions and conclusions. Anything that does not directly address the tax issues in the assignment question ought to be omitted from your submission.
Recall that the aim of this assignment is to persuasively communicate the appropriate tax treatment of the tax issues raised in the question. This is to assess written communication which is an important professional skill and also a graduate quality.This means that you are expected to explain your reasoning, not just provide an answer.The ‘cite, describe, apply’ method is a framework that helps you explain or argue persuasively.
Even though the marker of the assignment has tax knowledge and experience, do not make assumptions about it. In fact, the best way to be persuasive is to assume they have no tax knowledge at all and clearly cite, describe and apply all relevant law and legal principles used.
The following notes prescribe the layout of the assignment. Failure to follow these may result in penalties.
General layout
An assignment is required to have the following parts:
Cover sheet
Text of the paper
A template has been provided for you to complete the assignment which includes a cover sheet, space to write your text and a feedback sheet. PLEASE USE IT. If you do not, the marker will not fill in the feedback sheet.
Please ensure that the names of all team members are on the cover sheet. Team member’s names that do not appear on the cover sheet will not be awarded a mark.
Submit the completed template (one per team) on Learn online.
Headings
Use a heading for each tax issue you have identified. Since you do not need a synopsis(or introduction), you can essentially begin the assignment straight away with your first issue and proceed with the next issue and so forth until all issues have been dealt with.Your calculation should be placed at the end.
Tax issues that are treated in an identical fashion under the tax law may be addressed under the same heading.
ACCT 3002 Taxation Law Assignment-South Australia University.
Paragraphs
Paragraphs make text easier to read. Please use them to separate blocks of text.
Appendices
Appendices are to be avoided. All necessary points and calculations (where relevant) ought to be included under your issues heading as a self-contained reasonably arguable position.
Pagination
All pages following the cover sheet must be numbered. The template has numbered pages, do not remove them.
Text of the Paper
The text of the paper should be in font Times New Roman, point 12, 1 and 1⁄2 spacing.The text should never be in note form. However, the use of appropriate headings may be advantageous and is strongly encouraged. The template should already be in this format, do not change it.
Citations in Law
You should only cite relevant law in your reasonably arguable positions. While texts,rulings and other material may help you understand the law, it is not the law itself.There are some conventions specifically relevant to legal writing. For example, law journals generally require referencing by way of footnotes, with specific rules regarding form. However, for this course, referencing should be consistent with the Harvard System, with references cited in the body of the text. This is the style used in the study notes.
I understand that students who have completed courses within the law school have used the Australian Guide to Legal Citations (AGLC) method and may prefer it. However, I have stipulated that the Harvard system be used since it is easier for markers to see your citations.
Citing cases
As indicated above, cases should be cited within the text in the form illustrated by the following examples: FCT v Clarke (1927) 40 CLR 246; Coles Myer Finance Ltd v FCT 93 ATC 4214. All case names are to be put in italics or underlined. Where a reference is made to, or a quotation is taken from, a particular page of a case (say, page 249 of the Clarke case) that page should be cited thus: FCT v. Clarke (1927) 40 CLR 246 at 249.
Where a case has been cited in full, as in the above examples, subsequent references to that case may be shortened to the name of the taxpayer party – for example, Clarke.Cases are found in various law reports, two of which are referred to in the above examples – CLR and ATC, which are the standard abbreviations of Commonwealth Law Reports and Australian Tax Cases respectively. Take FCT v Clarke (1927) 40 CLR 246 as an example: 1927 is the year in which the case was reported; 40 is the volume number of the Commonwealth Law Reports and 246 is the page number of that volume
where the case report begins. In the case of the ATC reports, the year is also the volume number (e.g. 93 = 1993) so the general practice is to omit the year in brackets.
References to legislation
Mention about references to legislation is made in the introduction to the tax system study notes. The usual practice is to refer to sections, or their components, where referring to provisions of the legislation. Sections may contain subsections which in turn may contain paragraphs, and so on. Where a reference to a provision of the legislation is made, the convention is to precede the number of the provision with the abbreviation for ‘section’, i.e. ‘s’, except where the name of the provision forms the first word of a sentence. Therefore, you should write ‘Section 6-5’ where you are
referring to that provision at the beginning of a sentence and ‘s 6-5’ within the sentence.By convention, the abbreviation ‘s’ is also used within a sentence for subsections and paragraphs: for example, s 6-5(1) and s 6-5(3)(a) for subsection 6-5(1) and paragraph 6-5(3)(a) respectively.
The term ‘provision’ may be understood to mean a rule provided by the legislation. Thus, for example, s 6-5(1) provides that a taxpayer’s assessable income includes income according to ordinary concepts.
Assessment of written communication skills
Strong communication skills are essential in business and the professions. Professional written communication skills and presentation are expected in this final year course.The course continues the practice in the Financial Accounting 3 assignment where significant marks are allocated to demonstrating professional written communication skills. Marks will be lost for errors, including spelling and grammatical errors, up to a
maximum of 20 per cent of the assignment mark.
Written communication skills errors which will lose marks
- Spelling and grammatical errors
- Incomplete sentences
- Abbreviated sentences which resemble informal SMS language and slang
- Submitting a series of generally unconnected dot points
ACCT 3002 Taxation Law Assignment-South Australia University.
Organisation style guides and templates
It is common for organisations to have written communications style guides and templates. In this course, the style guide and template is clearly set out in‘Format/expectations for assignments’. The following are required:
Headings
Pagination
Paragraphs
Text of the Paper (refer to required font, font size and line spacing)
Citations of cases and legislation
Appendices are to be avoided. A reference list is not required.
Each case of not adhering to the style guide and template set out in
‘Format/expectations for assignments’ will be treated as an error which will lose marks.
Proofreading your assignment prior to submission is important. At this stage in your studies, all written assessment you prepare and submit needs to be a dress rehearsal for job applications and your career. Clients, employers and colleagues expect professional presentation. Employers will use professional presentation as a test of the quality of applications they receive for internships and graduate positions. Proofreading is good
practice in business and the professions. It identifies errors which can be corrected prior to submission. Working from a printed copy of a document can be more accurate and productive than attempting to edit on the computer screen and is recommended. Spell check programs are useful and should be used as a first stage of editing. The programs cannot, however, be relied on to detect all errors. Ensure that you take the time to thoroughly proofread and edit your assignment by printing a copy and carefully
scrutinising your work for good spelling and grammar.
Question 1
Assignment Part 2 is the continuation of Assignment Part 1, involving the tax affairs of Hekt or Aroma. In Assignment Part 1, you were required to calculate assessable income based on the information provided. For this second part, you should assume that his assessable income is $136,400 and take that as the starting point to deal with the following additional information (which is relevant for the year ending 30 June 2021, the ‘current income year’, unless otherwise stated) to determine Hekt or’s taxable income and tax payable including Medicare levy for the year ending 30 June 2021.
1.In the current income year, Hektor purchased the following items for the amounts specified for making coffee for sale in his business:
Coffee beans $20,000
Water $15,000
Milk $9,500
He also purchased $3,000 in cakes and biscuits from his mum to sell either with the coffee or separately. In addition to these, Hektor was invoiced $500 for coffee beans on 20 June 2021. He did not pay that until 10 July 2021.
Milk is a perishable item, even when refrigerated, so Hektor does not store significant quantities of it. Similarly, with the cakes and biscuits which are baked in small quantities every weekend and are generally sold out during the week. While water has a longer shelf-life, it simply is not practical to store large quantities of it. It is much easier to purchase a week’s worth of milk and water at a time, store it in a refrigerator at his home and bring in the quantities he needs each day in an esky. While Hektor may not get the best price for milk and water, he believes that purchasing it this way
saves him money in the long run due to less wastage. Hektor estimates that the amounts of these items that he had in storage at the end of the current and previous financial year would have cost him $75.
While Hektor has a room set aside for roasting beans using his own methods and equipment, he does not have a bean storage facility due to the prohibitive cost of building an airtight and temperature-controlled environment and maintaining it. Once he has roasted the beans, he takes them to a special storage facility operated by a consortium of bean roasters who each pay a membership fee to operate the facility and store their beans there. Each roaster’s beans are kept separate and Hektor can collect his beans at any time in the quantities that he needs. Hektor estimates that at
the end of the current income year, he had beans costing $200 at home currently undergoing the roasting process while he had beans costing $3,000 in storage. At the end of the previous income year, he had beans costing him $100 at home being roasted and beans costing him $1,000 in storage.
2.Having attended business school, Hektor knows that branding is very important for building a successful business in the long-term. Part of building this brand involves wearing Espresso Love polo shirts while serving customers and while travelling to and from the cart during his working days. Sometimes he would wear the shirts at social functions where he knew he would meet new people with the aim of increasing
public awareness of his coffee business. He has 7 shirts in total (so he could wear a clean one every day) which cost $300 to manufacture. Working outside means being exposed to the sun, especially in the summer. To protect his skin and reduce the risk of getting skin cancer, Hektor wore sunscreen costing him $50 and an Espresso Love hat that cost him $40.
3.One day, Hektor noticed that the coffee grinder was not working as efficiently as it used to. The coffee was grinding too coarsely which did not allow the flavour to be extracted from his carefully roasted beans. He had the grinder blades sharpened at a cost of $25.
4.Other business expenses incurred for the current income year amounted to $30,000.This amount is to be treated as deductible for the purpose of the assignment.
5. Hektor’s PAYG Instalments for 2021 amounted to $9,000. He has private health insurance including hospital cover. Please ignore the private health insurance rebate.
6.Assume that all amounts herein are either exclusive of GST or are free of GST input tax credit entitlements, as appropriate. In other words, the effect of GST should be completely ignored. Similarly, with small business concessions.
ACCT 3002 Taxation Law Assignment-South Australia University.
Required
In your own words and on the basis of the provided information, calculate Hektor’s taxable income and tax payable (including the Medicare levy) for the income year ending 30 June 2021. Justify your answers with reasonably arguable positions citing all relevant law. Please note the following:
- Do NOT treat this as an accounting exercise. This is a law exercise and marks are awarded for the use of the ‘cite, describe, apply’ approach.
- Issues are NOT weighted equally in marks. Issues that require more law to be applied have more marks allocated to them.
- The numbered points above may contain more than one tax issue. Information provided in one point may be relevant to other points.
- Use information provided in assignment part 1 where relevant and appropriate.
2021 Resident Individual tax rates
These rates do not include Medicare levy of 2% of taxable income for individual taxpayers. There is an additional Medicare levy surcharge that is payable if the taxpayer does not have private health insurance with hospital cover and has taxable income above a certain amount. Medicare levy surcharge is not payable by taxpayers who have private health insurance including hospital cover.
ACCT 3002 Taxation Law Assignment-South Australia University.
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