Goods and services tax, Taxation

William Potter is a plumber currently operating as a Sole Trader in Levin. William has approached you, a tax accountant, for your advice on certain tax matters.

William's brother, Harry is returning to New Zealand after living in the UK for 12 years. Harry is also a plumber so William is looking at the possibility of them operating together as a partnership.

1. For each alternative business structure (sole trader and general partnership), outline two advantages and two disadvantages. Note that, for each structure, two of your points must relate to tax and two must relate to personal liability.  

2. Discuss Harry's position with respect to New Zealand Tax Residency.

3.  William is registered for GST and asks for advice on the GST implications of the following transactions:

a) $500 sponsorship of the local water polo team, the Potter Penguins

b) He attended an Australasian Plumbing conference in Adelaide and the airfare cost $600 and the Conference Fee $700 (New Zealand Dollars).

c) William owns the building which he operates his business from. Above the plumbing workshop is a small flat which William rents out to a student for $100 per week.

d) William imported a set of exclusive bath ware from France costing $10,000 for a celebrity client.

e) William buys a second computer for $800 (for Harry to use in the business) from his neighbor who is not registered for GST.  

4. William has heard that GST is rising to 15% and is concerned that this will be a larger cost to his business. Discuss.  

5. William has received the following amounts and asks if they are assessable for income tax purposes (cite legislative references in your answer):

a) William was called up for Jury service in January 2010 and received $350 in Jurors fees.

b) In 2009 William overpaid his provisional tax and received $250 in Use of Money Interest from Inland Revenue.

c) Rent of $5,200 from the flat above the plumbing workshop.

d) An elderly aunt died recently and left William a legacy of $3,000.

e) The Horowhenua Plumber's Guild gave William a $500 scholarship to assist him in attending the Australian plumber's conference.  

6. William has paid the following amounts and asks if they are deductible for income tax purposes (cite legislative references in your answer):

a) Membership fees of $250 for the Horowhenua Plumber's Guild.

b) $450 in fines for using his cell phone while driving.

c) Travel expenses for his son, Charles, to attend the National Secondary Schools Water Polo Tournament.

d) Advertising of $500 in the Levin community newspaper for his plumbing business.

Posted Date: 2/22/2013 4:13:29 AM | Location : United States







Related Discussions:- Goods and services tax, Assignment Help, Ask Question on Goods and services tax, Get Answer, Expert's Help, Goods and services tax Discussions

Write discussion on Goods and services tax
Your posts are moderated
Related Questions
Given the below facts, what is the total income effect for the year for an investor for its passive-level, trading investment? (Note: the investment is not sold during the year.)

"Alfred E. Old and Beulah A. Crane, each age 42, married on September 7, 2010. Alfred and Beulah will file a joint return for 2011. Alfred''''s Social Security number is 111-11-111

#queTonya had the following items for last year: Salary $40,000 Short-term capital gain 12,000 Nonbusiness bad debt (25,000) Long-term capital gain 8,000 For the current year, Tony

what is the rule of travelling allowance of 2013-14

presumptive tax is one way of enforcing compliance with the tax requirements.you are required to define presumptive tax and give examples of situations where presumptive tax is app

Roberta Santos age 41

Individual Retirement Account (IRA) - An IRA is a personal savings plan which allows an individual to make cash contributions per year dependent on individual's adjusted gross inco

In relation to the CGT provisions, which of the following statements are correct? Explain your answer citing the relevant law. (a) When disposal of property (CGT event A1) is by

Consider the following scenarios: a) Audit fees received by an auditing firm. b) Final ordinary dividend received. Dividends are declared on 31 December and are payable to sh

Avis''s taxable income for the year is $300,000 and Best''s taxable income for the year is $425,000. For each of the scenarios provided, (a) state if a control group has been creat