Private ruling: Pay As You Go Withholding
Date of advice: 3 June 2019
Published: July 2019
Ruling period: Year ending 30 June 20XX | Year ending 30 June 20XX | Year ending 30 June 20XX | Year ending 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Is there an obligation to withhold from payments made to State Team Officials, and Community Official, Coaches and Umpires under section 12-35 of Schedule 1 of the Taxation Administration Act 1953 ? | A1: No

Relevant facts and circumstances: You are an umbrella organisation for the sport across your state and currently have affiliated associations. Their aim is to provide a competitive environment where members can reach their potential by providing the best possible developmental pathways. You engage Community Coaches, Community Umpires and State Team Officials to assist in the development of players and ongoing game operations. Generally, the Community Coaches, Community Umpires and State Team Officials are relatives of current players, are former players or other persons with a connection to you. These individuals have specific skill sets and are engaged in the sport by a club or associate affiliation. All Community Coaches, Community Umpires and State Team Officials are provided with a policy and guidelines applicable to their relevant position and all intend to complete the Australian Taxation Office approved 'Statement by Supplier' to indicate the position as a pastime or hobby. In addition to cash remuneration, the individuals mentioned may receive a travel allowance for all metro-based travel, and a meal allowance for all regional areas. A coaching shirt and jumper are also provided by you. Community Coaches, Community Umpires and State Team Officials are required to incur expenditure various equipment. The payments to the coaches and observers are not intended to, nor do they usually cover expenses. The purposes of the payment is to encourage members of the community to participate in local sporting activities by subsidising the costs associated with participation and encourage participation in specific volunteer roles that are considered a hobby.

Relevant legislative provisions: Taxation Administration Act 1953 Section 12-35 of Schedule 1

Reasons for decision: Detailed Reasoning - Pay As You Go (PAYG) withholding: Subdivision 12-B of Schedule 1 to the Taxation Administration Act 1953 discusses payments for work and services. Specifically, section 12-35 outlines payments to employees. It states an entity must withhold an amount from salary, wages, commission, bonuses or allowances it pays to an individual as an employee (whether of that or another entity). Paragraph 14 of Taxation Ruling TR 2005/16 Income tax: Pay As You Go - withholding from payments to employees states for the provision to apply, there must be an employee, a payment of salary, wages etc. to an employee as a consequence of his/her employment and finally, the payment must be made by the entity. In this case each individual receives a cash payment as outlined in the Relevant facts and circumstances. The Commissioner accepts that the State Team Officials and Community Officials, Coaches and Umpires are not employees as the activities are a social or personal pursuit of a non-commercial nature and constitute a pastime or hobby. The payments received from the pursuit of that pastime or hobby is not for being an employee. Consequently, there is no requirement to withhold from those payments under PAYG.