OzVMX Forum
Clubroom => Competition => Topic started by: HL400 on May 10, 2009, 11:23:54 am
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Wow just read the Aus champs at QLD regulations, wow the cost to enter is $150.00,plus a week of work, fuel to get there, accommodation, I am looking at $1500, I am not stingy but the cost of racing is starting to blow the budget, what do you think about it. HL
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Oops I forgot to eat, $$$$$ HL
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Pommy mag Performance Bikes showed a breakdown in costs for a well heeled club racer, a BSB team, WSB, MotoGP and F1 team. Although the amounts varied the percentages spent on travel, accomodation etc etc were proportionaly the same.Getting to and from the meeting will be one of the biggest costs, unless you can share with someone.Fact of motorsport life unfortunately.
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I've been thinking about the possible benefits (taxwise) of sponsoring yourself if you're self employed.
Anyone else looked into this?
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Its a bit like a drug addict,you just keep doing it and don't worry to much about where the next lot of money is coming from... ;D
I'm pretty happy with the Nationals trip costing us about $7000,haven't bothered too much about adding it up...........of course that total includes taking the WA crew out for tea ;) because I told em I saved too much money :-X :D
cheers
Alison
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$1500 to have a shot at a National Title!?
Bargain!
No, really, I mean it.
Have a look at what other motorsport events cost, and you'll see that we're doing very well in the VMX world.
For example: To enter a single round of the Australian Rally Championship is $2650, and you'll go through at bare minium eight tyres that cost you $200 each, a lot more fuel (in both transporter and in the rally car), need to drag along a lot more mates, etc etc.
Then you've got to do it all another half dozen times to actually hope to win the championship. Not to mention that a competitive car is $100,000+++. Etc.
I can go on with the comparisons, but you get the gist.
Motorsport IS expensive. I hate people using that as an excuse to disregard the people that are pushed out of any sport by rising costs, and I'll fight against it.... Indeed it won't take much effort with Google to find me doing my na-na over people using that term in the rally world.
But to complain that competing in a National Title event that happens to be a long way from your home, is going to cost you a total of $1500 just leaves me gasping.
If anyone else can show me another form of motorsport that is cheaper than amateur MX/VMX, then I'll be very interested to hear about it.
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If you are self employed you can save some money by sponsoring yourself. Check with an accountant Mainline. I had to get some signs made up for the trailler. I know my other half was very happy with the savings.
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the problem with riding around with my mobile number on my bike would be obvious to everyone who has seen me ride ;D
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The tax thing is interesting - a few of the more knowledgable rally people reckon that there's lots of scope to make 'everything' tax deductable, if you're careful enough.
I had been wondering out loud about whether I could set up a 'shell company', simply to make my motorsport tax deductable. The greatly simplified version is that I probably could do so, providing the company took some money in, and that money was proportional to the 'advertising' money it spent on sponsoring me - simply having Nathan Industries spend $10k/year to sponsor me, with no income, would be very likely to incur the wrath of the ATO.
I didn't bother in the end - but if I did have a legitimate business, there's no doubt that sponsorship of old dirt bikes and rally cars would be its preferred way to advertise....
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Seek your own advice from your accountant should you be able to qualify under this ATO Interpretive decision, each case is undertaken on individual merits, seek advice first before proceeding is the only advice I could give (Disclaimer) ;) :D
This is available through the ATO home page so read wisely
http://law.ato.gov.au/atolaw/view.htm?rank=find&criteria=AND~sponsorship~basic~exact&target=JA&style=java&sdocid=AID/AID2005284/00001&recStart=1&PiT=99991231235958&recnum=7&tot=148&pn=ALL:::ALL
Copyright wont allow me to copy and paste in my current capacity so you will need to read through the link yourselves
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Being self employed, I am able to claim everything except the original purchase price of the bike,I do this for myself and my sons racing(....more like my son and the very rare opportunity I get on a bike)
The business name needs to be splashed all over the bike/rider, vehicle ect. ect. and all of the on going costs of racing are claimed as advertising costs....and I mean ALL.
The deductions where questioned a few years ago by the ATO, after a bit of too and froing they agreed it was a legit claim and clear sailing since. ;D
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Re the tax thing, just google ATOID 2005/284
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Rossco has obviously beat me to it. Forget I spoke.
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It goes beyond the income aspect, you must meet all the criteria as outlined in the Interpretive decision to make it legitimate deduction. If in the instance the ATO conducts an audit of your business affairs, they will ask that have you complied to all the requirements as set out in the decision.
Really makes those cheap full rebuilds a lot more tempting tho ;)
As for entertaining at the track, thats just a talent that I have been practising for years and would do even tho its not tax deductible, already planning a drink for the CRC
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HL
What that says to me is that the $150 entry fee is a small % of the overall costs competing.
Noel
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thats cheap if you compare it to modern mx nationals $500 a race as a privateer and theres 8 rounds
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HL
What that says to me is that the $150 entry fee is a small % of the overall costs competing.
Noel
Thats $87.75 after tax if your on 41.5% tax rate ;D
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Wasp,
You don't have to generate income from it, I make all my claims as a cost incurred to me to advertise my business, it may be dfferent for companies (I'm a sole trader)
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Wasp,
You don't have to generate income from it, I make all my claims as a cost incurred to me to advertise my business, it may be dfferent for companies (I'm a sole trader)
Make sure you read between the lines as to what the ATO is really saying, the Auditors would love to hear you make that statement to them EVO550.
Quote:Section 8-1 of the ITAA 1997 allows a deduction for all losses or outgoings to the extent that they are incurred in gaining or producing assessable income or are necessarily incurred in carrying on a business for the purpose of gaining or producing assessable income.
If you dont view to gain an assessable income from the sponsorship/advertising, you will be disallowed and that is straight from the rulebook
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thats cheap if you compare it to modern mx nationals $500 a race as a privateer and theres 8 rounds
Modern MX nationals have a few more overheads, like the profesional riders who expect to make a living off the deal and to some extent be paid to be there by the promoters.
The promoters of Supercross and Outdoor MX are on the horns of a dilema as the good guys will not come unless the money is there and the spectators will not come if the good guys are not there. In fact the pros also won't come if too many other fast guys are there to share the pie with....its a tough balancing act.
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I claimed all my expenses as a professional racer for years, of course I made a loss and had huge deductions so got most of my tax back, this was pre GST and BAS statemants and was perfectly legit as I was winning and paying tax on my prize money.... but making a loss
When they re did the tax laws and brought in GST etc, I received a letter from the tax dept that basically said that from now on you must make a profit first and then you could claim the deductions but you could not claim the expenses in order to incur a loss.
I have asked several different accountants since about claiming my racing expenses and they have all said the same - not any more, you must make a profit first
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So the bottom line is , as I guessed earlier , as long as you can proof that you are creating extra income due to sponsoring , its legitimate ?
Rossco,
Wasp asked if you needed to prove you are creating an income from the spnsorship/advertising to claim a deduction.
My point was that you don't need to generate an income from it to make a legit claim, it just needs to be seen as a legit advertising campaign, regardless of weather it's palstered on the side of a bike or a billboard on the side of the road or through the yellow pages or internet.
The intention is to create/generate income from it. Weather it does or doesn't all costs are deductable.
Claiming these kinds of deductions can sometimes be a double edged sword, as it can lower your taxable income to very small sums which can be good for a refund but ever gone to the bank for a loan, then try and explain the taxable income of $2200 for the previous year........it's not always as good as it seems.
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Your right noel, sounds like $150. is a bargan after all the responces that have come in about tax and the cost of other racing. So I better send in my entry and have a bash at it. HL
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So the bottom line is , as I guessed earlier , as long as you can proof that you are creating extra income due to sponsoring , its legitimate ?
Rossco,
Wasp asked if you needed to prove you are creating an income from the spnsorship/advertising to claim a deduction.
My point was that you don't need to generate an income from it to make a legit claim, it just needs to be seen as a legit advertising campaign, regardless of weather it's palstered on the side of a bike or a billboard on the side of the road or through the yellow pages or internet.
The intention is to create/generate income from it. Weather it does or doesn't all costs are deductable.
Claiming these kinds of deductions can sometimes be a double edged sword, as it can lower your taxable income to very small sums which can be good for a refund but ever gone to the bank for a loan, then try and explain the taxable income of $2200 for the previous year........it's not always as good as it seems.
Thats right and thats what I said, you must view to generate an income as per the tax act. If you dont view to gain an assessable income wether you do or not, it still must meet 8-1 ITAA 1997 guidelines. If you dont view to gain an assessable or generate an asessable income as you said its outside the scope. if you tell the ATO you dont have to generate an income to make it a legitimate advertising deduction, you are outside the interpretation of the meaning of the act and all parts etc will be disallowed
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So the bottom line is , as I guessed earlier , as long as you can proof that you are creating extra income due to sponsoring , its legitimate ?
Rossco,
It appears we are on the same page, perhaps we just interprete Wasps question differently.
I assumed he was asking, that before it is a legitimate deduction you need to prove that you are creating extra income from the advertising,
not just be seen to want to create income from the advertising.
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In other words there must be a business plan forecasting the potential extra income due to the outlay , thats my interpretation from Ross , and he is the expert .
No, youve read the link, its pretty well self explanatory, now your only screwing with us :-\
Having said that , we must first have some income , before we can make deductions :D
No, now you need to go and talk to your accountant i would reckon ::)
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THANKS FOR THE TIP ROSSCO
I OFF TO SEE MY ACCOUNTANT TODAY
ALSO AGREE WITH NATHAN
I RACED CARS FOR YEARS
CARS COST AT LEAST TEN FOLD