Raymond works as a sales manager for Dawn Pty Ltd.

Raymond works as a sales manager for Dawn Pty Ltd. For the 2020 FBT year, the details of Raymond’s remuneration package are as follows:

• Commissions $33,000 (in addition to his base salary)

• Superannuation contributions by Dawn Pty Ltd: $9,760

• As Raymond has to travel around the state he was provided with a new car on 1 September 2019. The car cost $47,000 and it is fully maintained by Dawn Pty Ltd, except that Raymond contributes $700 per FBT year for petrol expenses. On 31 March 2020, the odometer on the vehicle showed it had travelled 22,000 km. Dawn 

Pty Ltd has chosen the statutory formula method to value the car fringe benefit.

• The business pays all Raymond’s mobile phone accounts – in total $1,228 for the 2019/20 FBT year. Raymond estimates that he uses his mobile phone for business purposes 40% of the time.

Required:

a) Discuss the possible fringe benefit tax implications for Dawn Pty Ltd in respect to Raymond’s remuneration package for the 2019/20 FBT year. Your discussion should address each element of the remuneration package. In your discussion identify the type of benefit involved and the relevant legislation.

b) Determine the Fringe Benefits Tax liability (if any) for the 2020 FBT year for Dawn Pty Ltd (in respect of Raymond’s remuneration package detailed above) showing all calculations and workings.