Race car claimed on tax

[KPOJ]

What chance do i have of claiming my race car on tax?

It carry's the company name, promotes the company's products by having them on the car.
Will the tax man like me having a good time.

Worth a try.

Thanks in advance

[xls3v]

i like it...... could be on to something

[MightyXR6Turbo]

I'd doubt you'd be able to. You can't really justify incurring the expense in the course of earning assessable income. The link isn't really there. You'd be best writing to the ATO for a Private Binding Ruling on the issue.

[Scott]

Sponsorship is deductable, afterall, it is advertising. Talk to your accountant about it, my father inlaw sponsors both of his sport sedans and makes some degree of deduction for it.

[KPOJ]

Who is your father in-law. PM me his name if you dont want it out in the public.

[GTP 290]

set up another buisness that sells advertising, "buy" the race car to use as a 'billboard'. Sell advertising space to your first company. Hope you understand what I'm talking about. A friend of mine does the same thing with his drag car and writes off the whole thing on tax because basically if the billboard isn't out doing what it's supposed to then you can't run your buisness.

[GT69]

Originally Posted by GTP 290

set up another buisness that sells advertising, "buy" the race car to use as a 'billboard'. Sell advertising space to your first company. Hope you understand what I'm talking about. A friend of mine does the same thing with his drag car and writes off the whole thing on tax because basically if the billboard isn't out doing what it's supposed to then you can't run your buisness.

I like that

[MR.BA.GT.332]

hmmm, i have a pty ltd company... can i "buy" my xa for the company put the companys name on the side as "advertisement" and all running cost write off on tax? sounds good to me... yeh im just having a joke i know nothing about this stuff but be awesome if you could do it. let us know how u go

[GT-E]

It would be nice if it was a simple as the suggestions above, but it is not.
My wife is a CPA and did a heap of research for me on this exact subject.
To write it off as advertising and not incur FBT, would require the racecar to be a viable business that will survive the ATO's business test for being a valid business.
To sponsor yourself to race, would not be considered advertising but a fringe benifit, as any advertising needs to be done "at arms length" which means not related to the directors or staff.
After doing a bit more research, I worked out that I would need to run the car in recognised events (read telivised), have the potential to make a profit and gain my income from other sources aside from my own sponsorship.
All of these issues above are not applicable if you are a full time racing driver and this is your main source of income.

Anyone that is paying for their racecar from their company could be liable for a very big FBT bill if the ATO does not like the way it is setup.

One way I worked out you can do it, is if you have a mate who also is into racing and has a business and you sponsor eachother.

[Bundy]

Plenty of business owner that I raced against in speedway did just that, sponsored their own car, park it out the front of their business everyday as advertising then race it every second saturday night, Cool fun!!
Hell if you stacked it big enough you would make the TV news too

[KPOJ]

Originally Posted by GT-E

One way I worked out you can do it, is if you have a mate who also is into racing and has a business and you sponsor eachother.

Now that sounds the goods. I have seen lots if race cars that have been sponsored by their own company's. But a lot of people have said that if the tax man finds out you may be in it.

:togo:

Any more ideas? I really would like to do this to promote my company

[Scott]

There are lots of ways that your race car can legitimately contribute to your business.

1. Advertising whilst racing;
2. Corporate ride days - ie, private practice with a passenger seat if you can get one in;
3. Admission to the circuit on club days for your clients;
4. Locate the car at local shopping centre/caryard/hotel as a billboard/attention getter - charge $10/day;
5. Park it out front of your business as a billboard;
6. Get some of your clients/mates to sponsor the car - perhaps only $50/yr each;
7. Pick your most trusted clients and provide them a further discount on your services in return for sponsorship to the same value;

The thing I am getting at is that in order to have the race car as a reasonable thing to deduct, you need to make it (or atleast be reasonably argued) an income generating part of your business.

As you already have a business running, the sport sedan doesn't need to turn a profit unless you were running it as it's own business venture. But for the sake less dramas with the ATO, just run the ideas past your accountant and see what he says.

[Stefan]

Originally Posted by profi

Now that sounds the goods. I have seen lots if race cars that have been sponsored by their own company's. But a lot of people have said that if the tax man finds out you may be in it.

That may be right on the surface, but do you really know their company structure, who really owns the car, what they are claiming as tax deductions, who the directors of the companies are, their FBT liabilities etc, etc.

Most wealthy business men would pay little tax and have very little personal assets and would have gone to great lengths to create a very complicated company structure to enable them to create tax deductions and pay little tax.

[flappist]

Consult a professional tax accountant, their advice come with liability insurance.

Remember the difference between an ATO investigator and a terrorist is that you can sometimes negotiate with terrorists.......

[GTP 290]

Yeah I should have mntioned what was said above, you need to be seen to have advertising space for other companies. Which could work if you know some performance shops that are looking to get into sponsoring a car.