ATO spotlight on sport
Financial advisers looking after the interests of high profile sporting personalities need to be alert to the fact that the Australian Taxation Office (ATO) is currently closely examining the activities of sports clubs and their major sporting stars.
The ATO’s new-found interest in sport was revealed at a recent Gold Coast conference, where the Second Commissioner of Taxation, Jennie Granger, outlined the ATO’s approach, saying sport represented a significant and growing industry that in 2005-06 was worth $9 billion and involved in over 9,000 businesses.
She said many sporting clubs had transitioned from amateur to professional and become big businesses within which income sources had become more diverse, requiring sophisticated financial management and corporate governance.
Granger also said that many sporting clubs had become significant employers, with remuneration arrangements within the clubs becoming more complex and tailored.
Among the other issues being looked at by the ATO in the context of sport is what Granger described as “the vulnerability of people experiencing a dramatic increase in income over a short period to invest in dodgy schemes including the use of tax havens”. She said that the ATO was currently reviewing the lodgement of over 2,000 players, officials and administrators and was actioning around 300 outstanding returns.
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