Am I correct in assuming that if the organisation running the event is an incorporated body (ie. not profitable)and has elected, due to its turnover being less than $100,000 (or is the maximum for this type of body also $50,000)not to register for GST, then prize money is the same for all and uneffected by whether the rider is professional or amateur?

Wouldn't the professional simply account for this income as a GST free transaction?

In this instance we need to consider who is making the taxable supply or sale if you like. Here the riders are the one's making the supply of their services/expertise and are receiving compensation in the form of prizemoney. In turn the riders are the one's who may have to remit GST to the ATO if they are registered ie professionals.

The organisation running the event is paying for the services of those competing in their event and as such may be entitled to a GST credit if they are registered for the GST and they have paid an amount of GST to the rider.

I think the confusing part may be that the riders don't issue invoices as such for their services and the organisation running the event will normally pay prizemoney and complete any relevant paper work. In the GST environment now this is similar to a recipient created tax invoice RCTI

I hope that the above has not made understanding worse and I must say that this area can be difficult to understand at first.

I'm quite happy to discuss it with you further if you want to give us a call.

regards

Adam

I have referred it on and other "learned friends" and they agree - its certainly an interesting view of the world to say the least!!

The service, if in fact any is being provided, is being done primarily by the show provider. To list exactly what is being provided is a long list indeed.

The concept of a rider offering an invoicable service is just ridiculous.

If any form of business concept exists, then it is in the form of a rider paying a fee for using the facilities.

A secondary consideration is that if he/she is both skillful and lucky then prize money may be won.

Surely the organisers who provide some $20,000 to $30,000 of service costs is a far greater consideration than an individual competitor who may pay up to $100 - $200 in entry fees.

In the time between posting the original question and receiving your reply, I obtained another opinion from a tax consultant who agrees with the original post scenario.
ie. Incorporated non profit body - turnover less than $100,000 - GST free - no hassles. Riders record winnings as GST free income if it applies.

Again, I do not think that your reply has any merit.

For someone who remains anonymous, receives free advice, has their "city" accountant phone me to discuss my response and proceeds to bag my response thereon.......well...perhaps confused is an apt description.

I draw your attention to the ATO tax reform website where the issue of prizemoney is raised.....simply use the search function and you will discover that my response is not that wild and in fact has merit.

I will not waste my time going on but it's not too bad being known as "pretty wild" in this boring profession of ours.

Your other learned friends may suggest that a private tax ruling could be advisable to assist you in your confused state.

Your answer did not address at all the fact that there are there are two transactions.

One by the competitor when he/she pays entry for the use of the sporting facilities, stabling, membership, etc, etc. and one by the committee when they pay prize money to "professionals" if it is applicable. In fact your answer is totally misleading in this regard. Seeing that you have put yourself in the position as "expert" you are surely duty bound to advise us as to how our competition costs can legally be minimised or at least to advise on our options.

As there are hundreds of societies and clubs that run only one or two events each year, I still stand by my first suggestion which is that from a total competitor and committee standpoint, if a non profit organisation under $100,000 turnover does not register for GST, and does this in full knowledge that GST will be payable on "professionals" prizemoney, we will, as a whole, all be better off as GST will not be payable on all of the other ancillary competition costs such as entries, stabling, etc, etc. and seeing as the competition entry fee is somewhat of an arbitrary figure, normally between 10% - 15% of prizemoney, the estimated GST cost portion can be easily accounted for in this manner.

Now I know that you will refer to the other costs incurred by the committees that will in this case incur GST and will not be recouped, but in many instances these are not great as much is donated and voluntary.

So again I apologise, but please comment on the above and help us to minimise our ever increasing competition costs. Ridiculous fuel costs are doing enough damage by themselves without the full GST impact.

Firstly you seem to have a funny concept of our role in this forum. We contribute to this forum to assist people in respect of taxation matters as they pertain to the horse industry generally, to suggest that we are "duty bound" to tell you what you want to hear (even if it is not correct) is a stretch of the imagination to say the least. We do this for free to help the many wonderful people in the horse industry who may be confused and in some consequences frightened about the taxation system and how it affects them.

Whilst everyone should welcome constructive criticism, you are being offensive in your posts. You have accused Adam of not answering the questions and also ridicule his answers. The only questions asked were in respect of the situation if a rider is registered for GST which Adam answered correctly and completely, and then you ask whether it is the registered status of the organisation which is relevant which was also answered correctly and completely. You then say that his answers are not complete, what do you want a thesis as to the taxation system and how it pertains to the horse industry.If so go and buy Martin's book.

Finally, being Spring Carnival time I have two tips for you:
- dont listen to your learned friends when it comes to tax advice.
- lose the attitude if you would like your questions answered.

Kinds Regards

Louise Morris
Martin O'Connor
Chartered Accountants
(We actually put our names to what we have to say)