TR 2000/5A1 - Addendum
Income tax and fringe benefits tax: costs incurred in preparing and administering employment agreements
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1A. This Ruling does not consider the application of section 8-1 of the Act to the costs incurred by an employee in preparing and administering an employment agreement that forms part of a business being carried on by the employee. The High Court held in Spriggs v. Federal Commissioner of Taxation; Riddell v. Federal Commissioner of Taxation (2009) 239 CLR 1;  HCA 22 that each professional football player carried on a business of commercially exploiting their sporting prowess and associated celebrity, which included playing activities undertaken as an employee. The Court confirmed that the fees paid by each player to a manager to negotiate a new playing contract were an allowable deduction in the circumstances where:
- each business was well established and conducted in a commercial and business-like way;
- the player was not exclusively an employee;
- there was a synergy between the various income producing activities of the player; and
- the conduct of each business was anticipated in the framework provided by the playing contracts and the competition rules.
Spriggs v. Federal Commissioner of Taxation; Riddell v. Federal Commissioner of Taxation (2009) 239 CLR 1;  HCA 22
Commissioner of Taxation
2 March 2011