TR 2000/5A1 - Addendum
Income tax and fringe benefits tax: costs incurred in preparing and administering employment agreements
Please note that the PDF version is the authorised version of this ruling.View the consolidated version for this notice.
This Addendum amends Taxation Ruling TR 2000/5 to highlight that the ruling does not apply to an employee whose employment activities form part of a business that the employee carries on.
TR 2000/5 is amended as follows:
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
This Addendum applies on and from 18 June 2009.
Commissioner of Taxation
2 March 2011