Punting Business
 

How do I treat my punting like a business and set profit goals. What expenses should I include. The cost of my tipping service is $200 a year what else should I include.

Benny, I may be mistaken but it is my understanding that if punting is treated like a business and is profitable and somehow the Tax Office becomes aware of it then the profits may be taxable.

Maybe he refers to on a personal level, the issue with the tax office has been raised before and they won't bother unless you are involved in other racing related business, just punting won't do it, you would need to be buying a horse or selling your services or a registered bookie.

A few years ago one of my friends (an ex-accountant) swore that winnings on horse racing is not taxable. After disagreeing we both independently checked the Tax Office's web site and we both came to the same conclusion that if it is treated as a business then the profits, if any, would most likely be taxable. Of course, we both may be mistaken.

The ATO has clear guidelines on this issue.
Gambling alone, is not taxable unless you rent premises and / or employ staff.
There are various other criteria, such as do you keep records, do you employ bespoke software, do you have expenses etc.
It all has to combine to become taxable.
They won't even look at you, unless you are winning very large sums, then it get reported to AUSTRAC, and referred to the ATO.
Never register a company or business name, if all you do is professional gambling. The ATO will start asking questions.
Everything is linked these days, and I mean everything!

I applied for a temporary disability payment when I got injured this year and the wrath of God came down upon me. I was getting please explain from all sorts of Federal, Local and other Departments. Departments, that have nothing to do with my income!

I felt like Neo :(

I seem to remember this issue being raised a number of times on here over the last 18m - 2 years. A quick search will uncover chapter and verse I believe.

The ATO is very unlikely to allow expenses for most punters because most punters lose! Can you imagine the claims being put in for losses, year in year out? 99% of punters will fall into the 'carrying on of a hobby' category as opposed to conducting a business for which there are many tests. In short, out of pocket expenses relating to your punting activities will not be allowed as an offset vrs any winnings because these winnings are not classed as taxable income generated from the carrying on of a business. Unless of course you are a 'mister X' in which case, you may attract a special tax ruling. Lucky Mister X! Once again, there is plenty on here and in the papers if you care to do a little research.

Look at it this way: If you are winning on the punt, this does not mean that you are automatically a professional. And if you ARE one of the 'lucky 2%' who do win consistently, why would you want to flag this with the ATO?? On the other hand, if you are losing overall (after deducting expenses), the ATO will not want to know about it because every other tom dick and harry punter is in the same boat - see above.

The key objective of any tax collection agency is to collect taxes on behalf of the government. They are not in the business of paying out an avalanche of refunds. How could they be.. how would the bills get paid? Death and taxes - same as it ever was!

Cheers LG

When punting the least ( by a considerable margin) of your worries is the tax office

Nice one Aussie.

Until such time as you at least make a significant financial year profit they will consider what you are doing as a hobby.

When you get around to making that significant profit seek out a good account and find out your legal/tax position from an expert.