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  • Full Federal Court finds Racing Clubs are liable for Superannuation Guarantee Charge on unpaid superannuation for jockeys

    This week, the Full Federal Court ruled in favour of the Australian Taxation Office (ATO), agreeing that horse racing clubs and state racing boards are required to pay superannuation contributions on behalf of jockeys.

    The Court upheld the ATO’s superannuation guarantee (SG) charge assessments that were issued to a New South Wales thoroughbred race club and Queensland’s principal racing authority with respect to riding fees paid to jockeys during the period 1 July 2009 to 30 June 2014.

    ATO Deputy Commissioner John Ford said this outcome is an excellent example of the ATO’s ongoing focus on reducing the incidence of non-payment of superannuation guarantee in the community, especially by larger businesses.

    The ATO takes the non-payment of SG very seriously. Employers that do not pay the correct amount of SG contributions for their workers deprive them of their retirement savings they are entitled to.

    “Super is money set aside for employees’ future retirement and financial wellbeing,” Mr Ford said.

    In the matters of Commissioner of Taxation v. Scone Race Club Limited (SRC) and Commissioner of Taxation v. Racing Queensland Board (RQB), both SRC and RQB argued that they weren’t liable for super payments, because they only made the payments of riding fees to the jockeys on behalf of the owners for administrative purposes.

    The Court ruled in favour of the Commissioner, agreeing that it was the SRC and RQB which were liable to pay riding fees to jockeys for riding in a horse race and are therefore deemed to be their employers for the purposes of the SG legislation.

    Where the ATO finds that an employer hasn’t met their obligations, they are liable for the super guarantee charge (SGC), made up of;

    • the amount of super the employer should have paid,
    • interest on those amounts, and
    • an administration fee of $20 per employee per quarter.

    SRC and RQB have 28 days to seek special leave to appeal to the High Court.

    The ATO has a range of strategies and activities in place to educate, support, monitor and enforce compliance by employers. The ATO encourages people to report instances of non-payment and responds to every report of possible non-payment of SG from employees or former employees.

    “We will pursue outstanding debts, aiming to collect and distribute unpaid super and interest to employees as soon as possible,” Mr Ford said.

    In 2018–19, the ATO contacted more than 22,000 employers as a result of reviews or audits, and raised assessments of over $805 million.

    Employees who suspect they aren’t being paid their full SG contributions should follow the steps at ato.gov.au/unpaidsuper. We will then investigate the employer and keep the employee updated on our progress.

    Last modified: 18 Dec 2019QC 61028