Claiming racing costs

A place to chat about the state of the IPRA nation, ask (non-technical) questions about IPRA, etc.
Public Read and Write

Moderator: Moderators

Post Reply
aussieblackjack
pit crew
Posts: 32
Joined: Sun Dec 08, 2013 6:55 pm
Location: Australia

Claiming racing costs

Post by aussieblackjack » Thu Aug 09, 2018 3:13 pm

I’m sure there are business owners who advertise and brand on the cars and then claim some costs incurred associated with racing. Just curious to hear any opinions on the topic before speaking to my accountant

Thanks

User avatar
Steve thomas
You've got to be kidding, how many posts?
Posts: 4622
Joined: Sun Sep 10, 2006 10:18 pm
Location: Perth WA
Location: Perth WA

Re: Claiming racing costs

Post by Steve thomas » Thu Aug 09, 2018 7:15 pm

Following.
Back to the Past for the Future.

User avatar
davel
Site Admin
Posts: 1142
Joined: Tue May 24, 2005 8:42 pm
Location: Canberra
Contact:

Re: Claiming racing costs

Post by davel » Thu Aug 09, 2018 10:07 pm

aussieblackjack wrote:I’m sure there are business owners who advertise and brand on the cars and then claim some costs incurred associated with racing. Just curious to hear any opinions on the topic before speaking to my accountant

Thanks
The answer is “it depends”.

I think you’ll find that the accountant will say something like “reasonable expenses” that provide business value can be claimed and pass an audit. Justifying business value (to the ATO) on a few grand a year is pretty easy if you are in a related industry. If you try and claim $500k a year from an unrelated industry you might have a few more questions to answer.

The other approach is to claim a shed load, take out audit insurance, get audited and pay the fines. I wouldn’t recommend the second option ;-)

Sorry if that doesn’t help much but consider how you could argue the business value (e.g equivalent advertising expenses to get similar market coverage) if the ato ever coming knocking.

What industry are you in?
Cheers,

Dave
Therapy Masters
KE25 Corolla #80 Over2l
www.therapymasters.com.au

aussieblackjack
pit crew
Posts: 32
Joined: Sun Dec 08, 2013 6:55 pm
Location: Australia

Re: Claiming racing costs

Post by aussieblackjack » Fri Aug 10, 2018 1:53 pm

I have actually claimed costs in the past, around 30k worth and my previous accountant suggested that I cannot claim because I could not prove how the advertising was helping my business in achieving more revenue.

I don’t see how any industry could measure the success of it, he just thought it was asking for an audit and then at the time I couldn’t provide receipts. I ended up redoing tax returns. This was when I was an employee of a company.

Now as a director or a company (real estate) and a new excellent accountant (sacked previous) I would have much more weight in my advertising argument.

A colleague of mine actually started a specific company that sold and manufactured racing products and ran all his racing expenses through it in order to claim

User avatar
3sgem
forum freak
Posts: 1298
Joined: Fri Oct 14, 2005 5:11 pm
Location: Southern Highlands
Location: Southern Highlands

Re: Claiming racing costs

Post by 3sgem » Fri Aug 10, 2018 2:29 pm

A guy I knew very well who raced for many years said that the only real way to do it was to setup a separate business, such as 'aussieblackjack racing. So it's a legit business that has income and expenses and shouldn't make a profit, therefore doesn't reduce the budget. Your main business pays advertising dollars to the racing business.

I'm no expert, best to be fully informed of your legal position if you spend lots.
Paul,

...I've never been perfect... but neither have you!!!

User avatar
mtpanorama
I spend too much time in front of a keyboard
Posts: 2524
Joined: Sat Apr 05, 2003 5:02 pm
Location: Bathurst
Location: Bathurst
Contact:

Re: Claiming racing costs

Post by mtpanorama » Fri Aug 10, 2018 3:38 pm

I claim all my racing expenses. Entries/membership/practice I put through as advertising. All other running costs I just put through as vehicle expenses. I don't do any other form of advertising (paid) and due to the nature of my business (Signs) and the fact a large portion of my work is involving motorsport I think I have a very legitimate claim. My accountant doesn't have a problem with it and she just always tells me "as long as you can explain it to the ATO, go for it".
The other way I have (heard it) done it is to sponsor someone you know who races that has there own business and they sponsor you. You just swap invoices.
Shane Fowler Rx7 53
-------------------------------------------------
For all your signage needs, Shane's Signs 0422 418 725

aussieblackjack
pit crew
Posts: 32
Joined: Sun Dec 08, 2013 6:55 pm
Location: Australia

Re: Claiming racing costs

Post by aussieblackjack » Tue Aug 14, 2018 5:03 pm

good points and info thanks

if you run a business that is in some way shape or form involved in motorsport then no worries, otherwise very hard i think. last thing one would want is an audit :oops:

User avatar
TwinTurbo
You've got to be kidding, how many posts?
Posts: 10485
Joined: Sat Apr 19, 2003 11:46 am
Location: Sydney
Location: Sydney, IPRANSW

Re: Claiming racing costs

Post by TwinTurbo » Tue Aug 14, 2018 5:24 pm

aussieblackjack wrote:good points and info thanks
if you run a business that is in some way shape or form involved in motorsport then no worries, otherwise very hard i think. last thing one would want is an audit :oops:
That's not necessary, I know a plumber who gets work as result of advertising on his race car and I don't think plumbing has much to do with motorsport (OK, I suppose fuel lines, oil lines etc is really "plumbing", but I'm sure you get where I'm coming from). As long as we can show a link between the advertising and revenue gained then the ATO should be satisfied. If we slipped, say, a $100K through as advertising and only got $10k in revenue then I'm sure they wouldn't be happy with that. Keeping it relative, as always, is important.

FWIW, if you accountant isn't giving you that sort of advice, get another accountant. :wink:

Cheers
Gary

speaksgeek
pit crew
Posts: 48
Joined: Wed Jul 27, 2016 7:13 pm
Location: Melbourne VIC

Re: Claiming racing costs

Post by speaksgeek » Thu Aug 16, 2018 5:27 pm

http://law.ato.gov.au/atolaw/view.htm?d ... 1001000001

Particularly take note of:
For practical purposes and within the limits of reasonable human conduct, it is for the man who is carrying on the business to be the judge of what outgoings are necessarily incurred
Show that to your accountant, and get them to help you structure your business and racing correctly.

aussieblackjack
pit crew
Posts: 32
Joined: Sun Dec 08, 2013 6:55 pm
Location: Australia

Re: Claiming racing costs

Post by aussieblackjack » Fri Aug 17, 2018 2:17 pm

interest excerpt

i have emailed my accountant with some questions and awaiting a response.

User avatar
cammck
rookie
Posts: 21
Joined: Mon Jul 23, 2018 2:08 am
Location: Essendon Vic

Re: Claiming racing costs

Post by cammck » Thu Dec 06, 2018 11:42 pm

Cam McKinnon
IPRA VIC Member IP0512
Datsun 1600
Ph 0403 303 633

www.888capital.com.au

speaksgeek
pit crew
Posts: 48
Joined: Wed Jul 27, 2016 7:13 pm
Location: Melbourne VIC

Re: Claiming racing costs

Post by speaksgeek » Fri Dec 07, 2018 11:17 am

Interesting, but not really relevant to the discussion.
There have been many people who fund their racing lifestyle using stolen/illegal funds. It will happen again too.
This questions was, are my racing costs deductible as an marketing expense?

User avatar
cammck
rookie
Posts: 21
Joined: Mon Jul 23, 2018 2:08 am
Location: Essendon Vic

Re: Claiming racing costs

Post by cammck » Sat Dec 08, 2018 12:38 pm

speaksgeek wrote:
Fri Dec 07, 2018 11:17 am
Interesting, but not really relevant to the discussion.
There have been many people who fund their racing lifestyle using stolen/illegal funds. It will happen again too.
This questions was, are my racing costs deductible as an marketing expense?
Agreed, was more for a S##t stir - just found it ironic it tied in ATO staffers :)
Cam McKinnon
IPRA VIC Member IP0512
Datsun 1600
Ph 0403 303 633

www.888capital.com.au

User avatar
cammck
rookie
Posts: 21
Joined: Mon Jul 23, 2018 2:08 am
Location: Essendon Vic

Re: Claiming racing costs

Post by cammck » Sat Dec 08, 2018 3:24 pm

Some of the answers are found under this particular ATO tax ruling (relates to Motor Cycle Racing but would be relevant to Motor Vehicle Racing).

https://www.ato.gov.au/law/view/documen ... 1231235958

I must add this is general advice only, specific advice should be sought for your own individual circumstances.

Cheers,
Cam
Cam McKinnon
IPRA VIC Member IP0512
Datsun 1600
Ph 0403 303 633

www.888capital.com.au

speaksgeek
pit crew
Posts: 48
Joined: Wed Jul 27, 2016 7:13 pm
Location: Melbourne VIC

Re: Claiming racing costs

Post by speaksgeek » Mon Dec 10, 2018 10:25 am

Yes, that's the exact link from above.

Post Reply