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

Required skills

communication skills to:

determine and confirm taxation purpose, application and individual and business responsibilities, using questioning and active listening as required

share information, listen and understand

use language and concepts appropriate to cultural differences

numeracy and IT skills to:

make basic personal income tax calculations

use a calculator

use internet information

literacy skills to read and interpret information from a variety of sources

research and analysis for accessing, interpreting and managing information and determining where to find professional financial services

learning skills to maintain knowledge of taxation issues and requirements

Required knowledge

relevant government legislation relating to taxation

roles and relationships between government agencies responsible for taxation, individuals and business

sound knowledge of issues relating to taxation information

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.