Edited version of private advice

Authorisation Number: 1051512355211

Date of advice: 17 May 2019

Ruling

Subject: Pay As You Go Withholding

Question 1

Is there an obligation on the Club to withhold from payments made to players under section 12-35 of Schedule 1 to the Taxation Administration Act 1953?

Answer

No.

Having considered your circumstances as a whole and the relevant tests, we agree with your reasoning. Example 7 in Taxation Ruling 1999/17 supports this interpretation of the law. You are therefore not required to withhold income tax when paying your players. Further information on employee or contractor can be found by searching 'QC 33182' on ato.gov.au

Question 2

Is there an obligation on the Club to withhold from payments made to coaches under section 12-35 of Schedule 1 to the Taxation Administration Act 1953?

Answer

No.

Having considered your circumstances as a whole and the relevant tests, we agree with your reasoning. Example 7 in Taxation Ruling 1999/17 supports this interpretation of the law. You are therefore not required to withhold income tax when paying your coaches. Further information on employee or contractor can be found by searching 'QC 33182' on ato.gov.au

Question 3

Is there an obligation on the Club to withhold from payments made to trainers under section 12-35 of Schedule 1 to the Taxation Administration Act 1953?

Answer

No.

Having considered your circumstances as a whole and the relevant tests, we agree with your reasoning. Example 7 in Taxation Ruling 1999/17 supports this interpretation of the law. You are therefore not required to withhold income tax when paying your trainers. Further information on employee or contractor can be found by searching 'QC 33182' on ato.gov.au

This ruling applies for the following period:

Year ending 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

The Club is a semi-professional sporting club.

The Club plays in the competition governed by sporting association.

Payments to Players

Currently, player payments are only made to 1st Grade players. There is a total payments cap in place from the 20XX season.

Based on the cap, players at the club are paid a maximum of $XX per match.

It is expected around X players will play 1st Grade this year.

The maximum number of matches amounts to XX includes include three possible finals matches. The Club does not to pay for finals. The maximum a player could receive during a season, assuming they plays all matches is $XX.

1st Grade players are engaged in full-time study or work.

Players do not receive any allowances and benefits other than their match payment. All players irrespective of their grade are covered by insurance; this cost is covered by the sporting association.

The players are not professional players. The payment is to compensate for out of pocket expenses incurred during the financial year in their participation in the matches for the Club. The purpose of payments is to encourage members of the community to participate in local sporting activities by subsidising their participation.

Players are encouraged to attend training. Training is not compulsory, but may have a bearing on selection.

·         The expenses incurred by Players cover:

·         Travel - training and matches

·         Travel - attending to Club functions

·         Laundry

·         Equipment expenses (Boots, runners, mouthguards, bags, balls etc.).

·         Training kit (shorts, socks, skins, track pants, beanie)

·         Registration

·         Gym membership

·         Training equipment at home

·         Medical bills - Physiotherapy/Chiropractic's/Massage/Podiatrist/etc. and all Medicare gap costs (unless covered by private health insurance)

·         Share of Internet & phone costs - club communication via Facebook and SMS, player video highlights need to be viewed, research into opposition teams

·         Share of phone/computer costs

·         Medical Supplies - pain relief, strapping, braces etc.

Out of pocket expenses incurred by 1st Grade players in preparing for and attending training, matches and official Club functions, generally exceed their total payments for the season.

Payments to Coaches

Playing coaches are not usually getting payments as a 1st Grade player as well as payments for being a coach.

The fees paid by the Club to coaches are not intended to cover the full amount of out-of-pocket expenses. The amount is meant to offset costs of travel, training gear (which may include shoes, boots, socks, shorts, shirts, whistles, trousers, cap, sunglasses, rain jackets etc.) and certain accreditation courses (some courses are paid for by the Club). The purpose of payments is to encourage members of the community to participate in local sporting activities by subsidising their participation.

The primary motivation for coaching is a love of Australian Rules football and a desire to contribute to and participate in the community in which the game is played. Motivating factors include the opportunity to be involved in the game, achieve and maintain a greater fitness level and socialise with friends on a regular basis.

There are generally 2 coaching sessions per week plus the match itself. There is a minimum of 15 rounds of football (home & away) plus 10-12 weeks pre-season.

All coaches have a day job which they consider to be their vocation. Out of pocket expenses incurred by coaches in preparing for and attending training, matches and official Club functions, generally exceed their total payments for the season.

Payments to Sports Trainers

The Club engages Sports Trainers to attend training and matches.

There is no requirement for a trainer to attend any particular training session or game, and specific trainers are not forced to be with any particular team(s).

Trainers will not receive any other allowances or benefits from the Club.

The fees paid by the Club to trainers are not intended to cover the full amount of out-of-pocket expenses. The amount is meant to offset costs of travel, training gear (which may include shoes, boots, socks, shorts, shirts, trousers, cap, sunglasses, rain jackets etc.) and accreditation courses.

The purpose of payments is to encourage members of the community to participate in local sporting activities by subsidising their participation.

During 20XX, all trainers worked full-time in other paid employment, undertaking studies or working part-time in employment unrelated to sports training.

Relevant legislative provisions

Taxation Administration Act 1953 Section 12-1 of Schedule 1

Taxation Administration Act 1953 Section 12-35 of Schedule 1

Income Tax Assessment Act 1997 Subsection 6-5(1)

Income Tax Assessment Act 1997 Section 6-10

Income Tax Assessment Act 1997 Subsection 15-2(1)