Scheme for AFL fans to claim club membership fees as tax deduction labelled a ‘rort’

Some AFL clubs are alerting footy fans they can claim tax deductions on their club membership payments in a sneaky workaround, but tax experts have issued strong advice to anyone considering this “rort”.

Footy fans are being induced to claim tax deductions on club membership payments, triggering accusations of a “rort”.

The scheme is devised to discourage supporters from cashing out their 2020 membership fees, worth more than $250 million.

Clubs are currently alerting supporters that they can pledge all or part of their fees as a “donation” to the Australian Sports Foundation, requesting they be passed on to their team’s “sustainability” fund.

The foundation takes five per cent, with the remainder going back to the AFL club.

Because it is a “donation”, the supporter can then claim a tax deduction — between 15-45 per cent.

For a member with a standard $400 season pass, the club would pocket $360 and the average fan would receive $130 back.

A wealthy supporter with a $1000 membership could claim about $450.

Melbourne University taxation specialist professor Ann O’Connell said ordinary Australians struggling in the COVID-19 crisis should not have to prop up the hugely profitable AFL competition.

The foundation was supposed to encourage grassroots sports — not major organisations with multimillion-dollar revenues, she said.

“It should be viewed as a rort,” prof O’Connell said.

“It is clear that it was never intended that any membership payments to AFL clubs would be tax deductible.

Footy fans can potentially claim their membership as a tax return. Picture: AAP Image/Daniel Pockett

“Given that so many in our community are financially distressed, is it really a good time for the AFL to be asking taxpayers to foot the bill?”

An Australian Taxation Office spokesman said: “For members who choose to donate their refunds, they can only claim a tax deduction if they … have not received, and will not retain, any member benefits in return for their donation, including any form of preferred member status in current or future years, including on season resumption.”

Adelaide is offering members a tax deduction on pledges, while promoting that they can retain a reserved seat for season 2021, maintain their “consecutive years of membership” status and can even access games this year if they crowds are permitted.

The Crows offer states: “Adelaide Football Club game access members can maintain their membership …. and receive a range of recognition and reward items”.

Prof O’Connell said: “The fact that the member receives other rights, including priority rights in future seasons means that the payment is made under a contract, for consideration – it is not a gift.”

While the ATO said offers were routinely assessed, Prof O’Connell said the arrangement was likely to “seriously compromise the whole concept of gift deductibility … and may attract the rules around tax avoidance, particularly given the clubs already have most of the money”.

Foundation chief executive Patrick Walker said: “This is a financial sustainability issue for these clubs … you cannot make a donation and have any benefits linked to it. We are very clear about it. The ATO are very clear about it.”

But Mr Walker said he did not believe that the incentives offered to fans under the scheme amounted to a “material benefit”.

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Originally published as Scheme for AFL fans to claim club membership fees as tax deduction labelled a ‘rort’