Lawler Partners Hospitality

GOODS & SERVICES TAX (GST) - Are you paying too much?

The taxation of Registered & Licensed Clubs is very complex and often not well understood especially in relation to GST and mutuality.

We are completing tax reviews for registered clubs and those reviews where income tax has not been treated correctly has resulted in tax refunds of many hundreds of thousands of dollars and even well in excess of $1million for larger venues.

Goods & Services Tax (GST)

We find most clubs are still incorrectly accounting for GST, especially in relation to gambling and promotional activities.  Our tax reviews have identified that discounts, vouchers, prizes and loyalty transactions cause the most complexities for venues. 

The GST Act has special rules on how to treat gambling and promotional activities which is not fully understood by venues. We recommend a detailed GST review be completed to ensure your venue is accounting for these transactions correctly.  We also note that incorrect tax treatment can cause the annual financial report to misrepresent the true position of the club resulting in exposure for the Directors and management.

Mutuality

For clubs which are not exempt from income tax, the taxable income of the club is determined based on the non members visiting the Club and other statutory assessable income and deductions such as interest, dividends, rates, superannuation, etc. 

We find many Clubs do not correctly calculate their non-member percentage including consideration of alternate methods, particularly gaming based methods.  A club can secure significant income tax savings by ensuring their non member percentage is calculated correctly and that due consideration is given to all income and expenses of the club.

We have seen clubs with high visitor levels, particularly clubs with high visitor drawing capacities or those located in tourist areas, that have incorrectly calculated their tax liability. In these cases we have been successful in securing tax refunds of over $1,000,000 in some cases by correctly re-calculating prior year income tax returns and applying for amendments to correct the errors. We recommend you review your non member calculations for the current and prior years to ensure your tax position is minimised.

Where to from here? 

We recommend you contact David Farley on 0409 656 297or Peter McLean on 0425 266 120 to organise a meeting or to discuss your specific circumstances.