It has come to the attention of Clubs SA that a number of member clubs have received correspondence from the ATO with respect to their tax status.

As a reminder every club who self assesses their entitlement to an income tax exemption needs to undertake an annual review and put this in a safe place to be presented to the ATO on request.

 The main issue for Clubs when undertaking their annual review is confirming that they are in fact either involved in sport or encouragement of a sport.

 The following example from the ATO illustrates this point:

       A Non- profit club provides dining, gaming and leisure facilities at a club house. It gives a yearly grant to an associated rowing club but is not involved in rowing itself.

      In this instance the Club would not be entitled to income tax exempt status and would need to rely on the principle of mutuality to remove any tax liability on its income.

      Any income from non-members will not be sheltered under the principle of mutuality and will be taxable in full

To assist with managing compliance in this area Clubs SA has arranged with Perks Chartered Accountants a free initial consultation to all Clubs SA Members.

 Therefore, if you have received a letter from the ATO or have any concerns regarding your Club’s entitlement to an exemption from Income Tax please contact Neil Oakes from Perks on 8273 9320 for a confidential discussion.