Elements and Performance Criteria

RANGE STATEMENT
The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included.
The purpose of taxation includes but is not limited to:
financing government activity
maintaining equity in the national economy
promoting efficiency where markets fail to control pollution or health dangers
social infrastructure
social services.
Ways that tax is collected include:
through federal taxes including:
personal income tax
salary
self-employment
investment income
superannuation contributions
business income tax
Capital Gains Tax (CGT)
customs and excise duties
foreign income or investment taxes
Fringe Benefits Tax (FBT)
Good and Services Tax (GST)
luxury car tax
Medicare levy
wine equalisation tax
through State and Territory taxes, including:
debits tax
land tax
payroll tax
stamp duty.
The Australian Tax Office (ATO) roles include:
managing and shaping tax, excise and superannuation systems that fund services for Australians
managing and shaping the revenue systems that sustain social and economic policy and fund services for Australians
administering legislation for taxes, superannuation and excise
addressing broader issues affecting Australia's revenue systems, such as:
aggressive tax planning
persistent tax debtors
globalisation
the cash economy.
Taxation revenue may be used to provide:
assistance to business and farming
cultural and artistic resources and support
defence and border protection
education
environmental protection
essential infrastructure such as:
roads
transport systems
public building
sport and recreation amenities
public housing
foreign representation and trade promotion for Australia
health care
justice systems
public safety
scientific and other research
welfare, income and community support systems.
Terminology used in personal taxation may include:
accrued interest
allowances
assessable income
capital gain/appreciation
deductions
dividends:
franked
unfranked
entitlements
gross income
Higher Education Contribution Scheme (HECS)
Higher Education Loan Program (HELP)
negative gearing
Pay As You Go (PAYG)
salary sacrifice
superannuation contributions
Tax File Number (TFN)
taxable income.
Rates of personal tax and calculators can be accessed from:
Australian Taxation Office (ATO) publications and website
accountants and tax agents.
Tax returns can be completed:
accountant
by an individual
tax agent
on-line or in written form.
Sources of ongoing information may include:
accountants and other financial services professionals
Australian Taxation Office (ATO)
Industry associations and professional organisations
State and Territory government agencies
Taxpayers Australia.
The structure of business includes:
sole trader: an individual trading on their own
partnership: an association of people or entities carrying on a business together, but not as a company
trust: an entity that holds property or income for the benefit of others
company: a legal a legal entity separate from its shareholders.

NB Business' have an Australian Business Number (ABN) or and Australian Company Number (ACN) to identify them for taxation and other government reporting purposes.
Business tax is assessed through:
Business Activity Statements (BAS)
payroll
allowable deductions
capital gains
financial adjustments such as:
write-offs
revaluations
profits and losses
superannuation payments
fringe benefits assessment.
Individualscan determine their tax liability by:
assessing income:
capital gains
employment
foreign
investment
pensions, payments and annuities
rental property income
assessing deductions:
allowable medical expenses and private health insurance rebates
capital losses
dependent rebates
gifts and donations
pensioner and mature age worker offsets
rental property expenses
tax offsets
work related clothing expenses
work related education expenses
work related travel expenses
zone and overseas forces allowances.
Small business operatorspaytax by:
lodging Business Activity Statements (BAS) and paying Pay as You Go (PAYG) instalments to the ATO
lodging returns and paying State and Territory governments:
land tax where applicable
payroll tax (rate varies by jurisdiction and depends on size of payroll so many small business operators are exempt)
stamp duty on:
hire purchase agreements
insurance polices
leases and mortgages
motor vehicle purchases
property transfer.
Under or overpayment of tax may involve:
claiming interest on early payments that may be possible for certain tax categories such as:
income tax
Higher Education Loan Program (HELP)
Higher Education Contribution Scheme (HECS)
Student Financial Supplement Scheme
amended assessments of earlier years
paying interest on overdue amounts.

EVIDENCE GUIDE
The Evidence Guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.

Overview of assessment

Critical aspects for assessment and evidence required to demonstrate competency in this unit
Evidence of the ability to:
analyse and clearly explain the role of taxation for individuals and small business in Australia
analyse and critically evaluate taxation responsibilities and their impact on personal financial management
understand and apply the skills necessary to actively monitor and assess taxation liabilities.

Context of and specific resources for assessment
Assessment must ensure:
competency is demonstrated in the context of the the range statement
access to the internet
access to current information about Australia's taxation system.

Method of assessment
A range of assessment methods should be used to assess practical skills and knowledge. The following examples, in combination, are appropriate for this unit:
evaluating an integrated activity which combines the elements of competency for the unit or a cluster of related units of competency
verbal or written questioning on underpinning knowledge and skills
setting and reviewing simulations or scenarios
group discussion to determine and confirm understanding.

Guidance information for assessment