It’s hardly any secret that it’s not easy for a person to have a
business of racing and/or breeding approved by the ATO. This
has not been made any easier when you consider that from 1 July
2009, high income earners (those with an adjusted
taxable income greater than $250,000) will not be able to claim
their losses immediately unless they can prove to the ATO that
their activity has long term “viability”. I have commented ad
nauseum about this new requirement since this new rule was
announced in the 2009 Budget.
N.B. The “viability” request must be in an “approved form".

Regardless of whether you are a high income earner trying to meet
the new budget requirement or just trying to demonstrate that
your activity meets the ATO business tests, there is one constant
that simply can’t be ignored – claiming a business status is far
easier when you have prepared a current horse Business Plan.

From my constant dealings with the ATO, it’s obvious that the ATO
has never been more serious about business plans, so it’s about
time I provided a quick summary as to how to prepare a plan that
can hopefully help you survive an ATO audit and, importantly, get
your horse losses approved.

ATO Business Plan guidelines:
For the record, the ATO recommends the following as minimum
disclosures in any business plan:
- a description of the business;
- the markets to which the taxpayer proposes to sell and realistic
estimates of quantity and volume of sales;
- income expected from the activity;
- the research that has been conducted by the taxpayer;
- information about the property on which the taxpayer proposes
to conduct the business;
- information about expected expenses and capital outlays; and
- information about how the taxpayer proposes to pay for the
expenses and capital outlays.

PAUL CARRAZO CONSULTING