Dear ACA registered Game Development Coaches,
This email is with regard to members who undertake Past Player Game Development Program coaching appearances for the ACA. The ACA recently requested the Australian Taxation Office (“ATO”) confirm the income tax status of payments made to past playing members of the ACA under the Past Player Game Development Program.
Despite our vigorous advocacy that the receipt of these payments should not be treated as taxable income of our members, the ATO has informed us that it considers past players to be independent contractors providing services under a contract with the ACA with an expectation of profit.
As such, where members are independent contractors and engage in the Past Player Game Development Program as part of a business/enterprise, they must report amounts received from their participation in the program as assessable income in their Income Tax Return.
Any unreimbursed expenses incurred by the member in earning such income (e.g. travel costs) may be able to be claimed as a deduction.
The ACA then enquired as to whether earnings from the ACA’s Past Player Game Development Program would be taxable if they were minimal and the member is not engaged in professional playing or coaching activities
In these instances, the ATO has confirmed that where ACA members are not engaged in professional playing or coaching activities generally (i.e. outside your participation in the Past Player Game Development Program) their participation in the program does not constitute the carrying on of an enterprise. As such, ACA Members do not need to apply for an Australian Business Number and the ACA does not need to withhold tax from members gross payment made under the Program.
What does this mean for me?
· The ATO does not require those members who perform a minor and infrequent number of Game Development Appearances per year to apply for an ABN, and therefore do not need to submit invoices for payment to the ACA.
· Instead these members are required to sign and return to the ACA a Statement by Supplier form that indicates you are not engaged in professional playing or coaching activities.
When completing this form, where you are not engaged in professional playing or coaching activities, please tick the box under reasons for not quoting an ABN, the payer is not making the payment in the course of carrying on an enterprise in Australia.
· Alternatively, those members who complete more regular or multi appearances (or have a coaching role) may be viewed by the ATO as “independent contractors providing services under a contract with the ACA with an expectation of profit” and may be required to quote an ABN and to invoice the ACA as per current policy.
It is the ACA member’s responsibility to ensure they comply with the ATO regulations in relation to the treatment of income from the Past Player Game Development Program. The ACA encourages members to seek independent taxation advice on this matter as required.
If you have any queries in relation to this please do not hesitate to contact Stephen Williams from the ACA on 03 9698 7209, or firstname.lastname@example.org.
Statement by Supplier form