Under the no-ABN withholding rules, if a business supplies goods or services to another business and does not quote their ABN, the business that receives the goods or services must withhold 46.5% of the payment to the supplier and pay this amount to us.
If you are carrying on an enterprise in the racing industry and you do not supply your ABN to the racing body, the racing body must withhold 46.5% from any payments they make to you. The same will apply to payments between trainers, owners, lessees and contractor jockeys/drivers.
Example: No-ABN withholding
Rosanne is a jockey carrying on an enterprise, but has not supplied an ABN to the racing body. Rosanne is entitled to riding fees and prize money of $1,000. The racing body must withhold 46.5% from this payment ($465) and pay it to the ATO.
Rosanne should supply her ABN to the racing body to avoid further withholding of monies. Rosanne will receive a credit of $465 when she lodges her next income tax return.
End of example
You may also make supplies to entities other than the racing bodies. For example, a trainer may make supplies of their training services to an owner. In this case, the trainer should supply their ABN to the owner (for example, on a tax invoice) to avoid amounts being withheld by the owner. Only owners who are carrying on a business of owning horses will be required to withhold amounts if an ABN is not supplied to them.
Some supplies are excluded
Some supplies are excluded from the no-ABN withholding rules. An amount should not be withheld if:
- the total payment for the supply is $75 or less, excluding GST
- the supplier is under 18 years of age and your payments to that person are not more than $120 a week
- the goods or services are supplied through an agent who has quoted their ABN on an invoice or some other document relating to the supply.
Also, you should not withhold amounts if you're satisfied that:
- the supplier is providing the goods or services in a private capacity or as part of a hobby
- the payment is to a non-resident who is not carrying on a business in Australia or through an agent in Australia, or
- the supplier is not a business because they have no reasonable expectation of profit or gain. To be satisfied that this exception applies, you need to obtain a statement to this effect from the supplier.
Statement by supplier
If you're unsure whether amounts should be withheld, you should ask the supplier to give you a written statement that the supply of goods or services is excluded and the reason why (see Some supplies are excluded).
The supplier can use the statement contained in Statement by supplier (NAT 3346) or create their own statement containing the same information. You must keep their statement for five years. If you suspect the statement is false, you must withhold 46.5% of the total payment.
If you are not carrying on an enterprise, for example you are a hobbyist, it is advisable for you to give the racing body a Statement by supplier or written statement indicating this.
The racing body will usually supply the forms to you.
End of attention
Providing a payment summary
If you withhold an amount, you will need to give the supplier a payment summary when you pay them (or as soon as practicable thereafter). The payment summary should contain details of the transaction and the amount withheld.
The supplier who has had 46.5% withheld from payments will be able to claim the amounts withheld as credits when they lodge their income tax return after the end of the income year.
The supplier will need to attach a copy of their payment summary to their income tax return.
If your circumstances change
Generally, if you supply your ABN (or complete a statement by a supplier) to a racing body in one state, you will not be required to provide this information again when you compete in a different state. When you supply your services in another state, the racing body in that state will usually have access to your original statement through a national racing database. You may need to confirm this with your state racing body.
If your circumstances change, for example you were a hobbyist but you are now carrying on an enterprise, you should notify the racing body of this change.