Answer to Question #80202 in Finance for Luke Nash

Question

FEEDBACK-The answer is incorrect. The BAS allows a business to report different taxes, some will be a credit (ATO owes money) like the GST credit in the Activity, which represents the difference between GST Collected and GST Paid.

Other taxes form liabilities (money owed to the ATO) like the PAYG Withholding in the Activity.



The difference between all the tax credits and liabilities reported in the BAS, including the FBT, is what will be either paid to the ATO or received from the ATO.

QUESTION-The activity statement allows a business to calculate obligations, allowing a single payment or refund for each reporting/ payment period, across the taxes.

For example, if in a quarterly reporting/ payment period, a business had:

· a GST credit of $15,000

· a PAYG instalment liability of $6,000

· a PAYG withholding liability of $1,500, and

· an FBT liability of $1,000

Would the business need to make any payments?

Answer 1

In accordance with business conditions (BAS) business must pay separately FBT and separate income tax. Based on the initial data, FBT is $1000. That is, the tax paid by employers is calculated on the taxable value of the benefits provided