All Charities posts

Re: Public fund and DGR requirements

NateH — Wed, 19 Feb 2020 01:36:20 GMT

Hi ,

Due to potentially not having all the details we can only really give general advice on Community. If you're looking for tailored advice on your situation it may be worth getting in contact with our early engagement team.

Hope that helps! Thanks, NateH

Re: Public fund and DGR requirements

ccb — Tue, 18 Feb 2020 04:04:55 GMT

Hi Mark,

Thankyou, I have already looked through those links but didn’t find many answers. Thanks anyway though, your help is much appreciated.

Re: Public fund and DGR requirements

MarkA — Tue, 18 Feb 2020 02:18:42 GMT

Thank you for your query and also in joining our community. Your very welcome!

Upon reflection there are a few variables that sit behind your questions so I think I have found a good link for you that you should be able to use to help you. See Deductible gift recipients Also visit the non-profit page link detailed on this . If you have further questions after you have looked at this please, come back to us and we will see how we can assist further.

Kind regards

MarkA

Re: Honorarium

TaxedoMask — Mon, 17 Feb 2020 05:15:09 GMT

The characteristic of the payment (based on how you described it) gives the appearance that it is not a genuine honorarium payment.

Some organisations provide benefits to volunteers that they may call an honorarium, allowance or one-off payment. However, if these payments are comparable to wages or a salary in disguise, then this may point to an employment relationship, and such payments should not be made to volunteers. The following are examples where a payment or pattern of payments may be deemed to be a wage or
payment for services:

if a payment is calculated with reference to time with the organisation or hours worked
if an allowance far exceeds the expenses actually incurred or is paid on a regular basis, or
a lump sum payment is in exchange for services provided.

emphasis mine, see here (Page 15)

Honorarium

Chris6543 — Fri, 14 Feb 2020 11:04:39 GMT

I’m part of an organisation that is choosing to pay its executive director an honorarium of $38k to do three days a week work. This seems more than is reasonable for an honorarium, but they are insisting they don’t need to withhold PAYG or pay super.

Public fund and DGR requirements

ccb — Thu, 13 Feb 2020 07:58:56 GMT

Hello,

I am after some advice about public funds. Sorry if what I'm about is all ignorant, but we are struggling to get answers.

We are a small wildlife shelter who were advised to create a public fund when we had an influx of animals and donation come through due to bushfires in 2009. We are no longer experiencing that influx and haven't for some time and are looking at the possibility of closing the public fund as it can be difficult to manage at times. Our main questions are as follows:

- Do we need a public fund to be able to give tax deductible gift reciepts? If we close the fund and are unable to give DGR's, can members of the public still claim donations?

- What is the maximum amount of money we can fundraise without a public fund, as a NFP organisation?

- If we close the public fund, could we apply to open another in the future if we get an influx of donations again?

Any help is much appreciated.

Cheers,

Cassey

Re: Reduction of travel allowance - specifically the meal allowance rate

ChrisR — Mon, 10 Feb 2020 13:52:18 GMT

Thanks for your question.

The determination sets out the travel and overtime amounts that we consider reasonable. These amounts only provide the maximum that your employees can claim without being required to substantiate their expenditure.

If you would like to have a look at Taxation Determination 2019/11, refer to our legal database.

You could theoretically set your own meal allowance rate as long as it is in accordance with your workplace's applicable award or agreement. If you require additional guidance about that, you may want to contact the Fair Work Ombudsman.

Thanks,

ChrisR

Re: Charity Employees and Exempt FBT income

ChrisR — Thu, 06 Feb 2020 01:26:21 GMT

Thanks for your question.

We recommend that you double check with your software provider to ensure that you are entering the amounts correctly. The gross wage figure shouldn't include any amounts that are exempt from tax.

The reportable fringe benefit amounts and reportable employer superannuation contributions section on our website provides some information on how you can report an employee's reportable fringe benefit amount via STP.

Hope this helps.

Thanks, ChrisR

Reduction of travel allowance - specifically the meal allowance rate

Nezily_mondejar — Tue, 04 Feb 2020 07:22:56 GMT

Hi,

Our NFP organisation follows ATO TD 2019/11 3 July 2019 for travel allowance. Our new management would like to reduce the meal allowance rates as it is very high. Can the employer set their own meal allowance rate for staff travelling?

The Award that we are under do not have a prescripted amount, only the term "reasonable' amount. It is the ATO who set a specific amount that is why it is being adapted. But it seems that the amount from ATO is a burden to NFP like us, can we reduce it?

Thank you in advance for any word of advice out there.

Cheers, Nezi

Charity Employees and Exempt FBT income

Posca — Sun, 02 Feb 2020 00:57:14 GMT

When you send pays to the ATO STP, should your gross wages include the exempt $611.50 per fortnight or not. I use MYOB and they only let me deduct the exempt amount from the gross pay. How does STP allow for the exemption at the end of the year so that the exempt is actually exempted?

Re: Registered Charity-GST-supply & sale electricity via embedded network to retirement residents

KylieS — Wed, 22 Jan 2020 20:15:30 GMT

Hi ,

Thanks for your patience.

The GST area have advised that this is a complex issue and request that you contact them via gstmail@ato.gov.au

KylieS

Re: Registered Charity-GST-supply & sale electricity via embedded network to retirement residents

KylieS — Tue, 21 Jan 2020 22:21:14 GMT

Hi ,

We will look into this one and get back to you.

KylieS

Registered Charity-GST-supply & sale electricity via embedded network to retirement residents

SMW — Fri, 17 Jan 2020 05:16:54 GMT

Does GST apply when a registered charity supplies and sells electricity via an embedded network to retirement residents?

GST concessions for non-profits organisations information states - certain supplies made by a registered charity that operates a retirement village may be GST-free. Those supplies must be made by the charity to a resident of the retirement village. The range of supplies which this GST-free treatment applies to, includes the supply of accommodation and the services related to the supply of accommodation.

Would appreciate any comments to support or unsubstantiate whether GST will or won't apply

Re: Tax implication on multiple scholarship holder

macfanboy — Fri, 17 Jan 2020 02:44:59 GMT

Whether scholarships are taxable or not depends on many different things.

It is best to complete the "Is my Scholarship taxable?"

Tax implication on multiple scholarship holder

RosieTrinh — Fri, 17 Jan 2020 00:14:26 GMT

Hi all,

I have a question about tax implication for mutiple scholarship holders.

If a person receives concurrent scholarships for the same course, should she or he need to pay income tax?

From my understanding, full-time study scholarship is exempted from paying income tax. However, in case a person holds mutilple scholarships for different courses, can all of them be treated as fulltime scholarship? it is suspicious that a person can do two full-time studies at the same time so I was wondering in this case if the money received from scholarships should be considered as an income and being taxed.

Thank you

Re: with holding tax

macfanboy — Sat, 21 Dec 2019 23:11:27 GMT

Withholding tax can be claimed back via lodging tax returns.

You can file amendments for the previous 2 years.

With the remaining ones as you have exceeded the 2-year limit, you should file an objection to the 2-year limit requesting the tax.

with holding tax

Aurora2020 — Sat, 21 Dec 2019 08:50:47 GMT

Our Rotary Club has had a long term deposit with the St George Bank since 2010, as we did not have a Tax File Number until last week, St George have been with holding tax on that account sine 2010.

I understand that the bank should refund any wth holding tax for the current faninacial year but how can we claim back any moneys deducted from previous finacial years.

the Form on the ATO website doesnt appear to applay to our needs as a not for profit Rotary Club

Re: Donation receipt entity name

KWinter — Wed, 11 Dec 2019 05:14:14 GMT

Hi Kylie,

Thank you very much for the response. That covers everything I needed to know.

Thanks,

Kyle

Re: Donation receipt entity name

KylieS — Tue, 03 Dec 2019 02:11:52 GMT

Hi ,

Thanks for your patience and apologies for the mix up with information.

As a DGR you are not required to issue a receipt, but if you do you must include certain information. If you don't include the specified information in your receipts, your DGR endorsement may be revoked.

Your organisation name, The Enneagram Movement, must be on the donation receipt. The information you need to include is:

• The name of your organisation (an abbreviation will be acceptable where the full name of your organisation cannot be shown on the receipt – however if the abbreviation does not readily identify your organisations you may need to publish the abbreviation publicly, such as on your website);
• Your ABN;
• A note that the receipt is for a gift.

You may also include additional information such as:

• The amount of money donated;
• A description of the gift if it was property
• The date the gift was given

You may include a note that the donation was made as part of the ‘Enneagram Prison Project Australia’ campaign.

Ultimately, for a donation to be tax deductible, your organisation needs to have complete discretion in deciding how to use donations according to the best interests and purposes of the organisation. However, donors can indicate a preference (for example, that the donation preferably be used toward the prison initiative where possible) and you can acknowledge this on the receipt.

If you would appreciate further clarification, you can contact our NFP Advice line , Monday to Friday, 8am to 6pm AESDT.

You can also view our webpage on Receipts as well as Taxation Ruling 2005/13 which discusses the tax deductibility of gifts including where donors have made a preference to how the donation should be allocated.

KylieS

Re: Donation receipt entity name

KylieS — Wed, 27 Nov 2019 01:58:48 GMT

Hi KWinter,

I have provided you with a response that is not applicable to you. I will get the correct information and edit that response.

Apologies

KylieS

Re: Donation receipt entity name

KWinter — Tue, 26 Nov 2019 04:08:56 GMT

Hi Kylie,

Thank you for the response.

I'm not sure I completely understand as I don't believe our fundraiser will fall into the 'providing entertainment' category. It will be an online crowdfunding campaign whereby the community will be donating to our charity. As we have DGR status, these donations should qualify for a tax deduction by the donators.

After reading the ATO requirements for DGR fundraising receipts, we need to include the following:

Name
ABN
Note that the receipt is for a gift
Amount
Date

My question is, for our receipts, can I use our registered business name of 'Enneagram Prison Project Australia' or do I need to use our legal entity name of 'The Enneagram Movement'?

Thanks,

Kyle

Re: Donation receipt entity name

KylieS — Mon, 25 Nov 2019 05:58:21 GMT

Hi ,

We will look into this one for you and get back to you as soon as we can.

KylieS

Re: Supplier Not Charging GST

evonmispets — Mon, 25 Nov 2019 00:12:26 GMT

It will be government fault

Re: Supplier Not Charging GST

Biggiesmalls — Tue, 19 Nov 2019 08:26:35 GMT

No, liability is on the person doing the invoice. There could be reasons they aren't required to register. However if you don't feel comfortable with the way your supplier operates you could consider getting a new supplier? You can also report tax evasion https://www.ato.gov.au/About-ATO/Contact-us/Report-fraud,-tax-evasion,-a-planning-scheme-or-unpaid-super/

Supplier Not Charging GST

Penglert — Tue, 19 Nov 2019 05:15:07 GMT

Good Afternoon

We have a supplier that is not registered for GST but we have paid more than 75K since 1/7/19.

They claim their business is trading as a foundation and is a charity.

They are not listed in the ACNC Register.

On the ABN lookup - they are not entitled to receive tax deductible gifts and are not registered for GST.

Question - who will be at fault if we continue to pay them GST Free if they were to get audited by the ATO and is there any comeback on us?

Re: religious body and FBT for religious practitioner

KylieS — Mon, 18 Nov 2019 01:01:21 GMT

Hi ,

Thanks for your patience.

In respect of FBT all benefits are exempt, provided the employer is a registered religious institution and the employee is being rewarded for performing ‘pastoral duties’ then there is no financial value limit.

The only requirement is that it is a benefit (not simply a payment of cash which would be salary) and that records are kept. This is usually accomplished through the use of an employee credit card paid for by the employer. As long as the card remains in debit and does not give ‘cash advances’ then all is exempt.

This is some extra information that might be of assistance in the future;
Exempt benefits--employees of religious institutions

Where:
(a) the employer of an employee is a registered religious institution; and
(b) the employee is a religious practitioner; and
(c) a benefit is provided to, or to a spouse or a child of, the employee; and
(d) the benefit is not provided principally in respect of duties of the employee other than:
(i) any pastoral duties; or
(ii) any other duties or activities that are directly related to the practice, study, teaching or propagation of religious beliefs; the benefit is an exempt benefit.

Thanks

KylieS

Re: Superannuation Guarantee

DuncanS — Sun, 17 Nov 2019 10:44:47 GMT

Firstly, the situation should be fixed ASAP.

With unpaid super, the ATO relies on aggrieved employees reporting unpaid Super.

You may wish to get an undertaking from the current Committee that they would be be responsible for any ATO issues.

The facts in your case indicate that Super was paid and did end up in the SMSF.

This case may be somewhat difficult to handle with diplomacy but I understand your concerns as a new Committee Member.

When I review an Association or a small business, I undertake a BAS Reconciliation.

I also state in the Notes to the Accounts whether a Salary/Salaries were paid and that SG obligations have been met (or not).

Duncan

Re: Superannuation Guarantee

Jaylow — Sun, 17 Nov 2019 08:40:54 GMT

Thanks Duncan,

Have used the tool. No invoices, no ABN. Employment contract specifies person concerned is required to attend office in person at prescribed times each week. He is covered by worker compo insurance policy and legal insurance if his actions in performing his job tasks cause 3rd party injury.

The annual review of charity finances is very light and focuses on internal processes. Auditor/Reviewer has no expertise in tax law. Line entry in books is one of "Salary and Super" and is reported as such in Financial Reports to AGM. But total payment goes to employee who I understand pays an amount into his own SMSF.

A previous part-time employee had salary and SG paid according to rules and also PAYG.

all advice welcome. This has been going on for several years.

Re: Superannuation Guarantee

DuncanS — Sun, 17 Nov 2019 02:50:57 GMT

The ATO has a employee/contractor tool.

It is important to determine whether the person is an employee or contractor.

Sometimes it is somewhat grey.

Has the person supplied complying Tax Invoices/Invoices (with a ABN)?

My understanding is that a small charity has a Review (or audit) conducted following the end of the FY and the AGM is held. I would be speaking to the Reviewer.

Let us know how you go.

Duncan

Superannuation Guarantee

Jaylow — Thu, 14 Nov 2019 06:27:22 GMT

I'm considering joining a committee of a small registered charity. I've checked out the books. It has one part-time employee engaged as a contractor for his services. Paid about 30,000 a year plus 9.5% for super. About $32850 pa all up. has been this way for about 4 years. Trouble is the super payments have been going direct to him and he has contributed the $2850 a year to his SMSF.

By my understanding, the charity should report this situation. and is required to pay the 9% later increased to 9.5% tof the total amounts previously paid to the employee (eg last FY $32850), backdated to when employment started, plus 10% interest, plus some penalties. This is a considerable amount of money, that is going to end up in the employees pocket..

When I raised this, I was told employee was a contractor and what was being done was correct. There was no need to report this to the ATO. My other concern is that, there may not be sufficient funds to cover what I think is owed and that the committee office bearers arlikely to be personally liable for the debt.

Any advice would be most welcome.

Re: religious body and FBT for religious practitioner

KylieS — Thu, 14 Nov 2019 04:48:11 GMT

Hi,

Thanks for your question, we are going to look into it for you and will get back to you as soon as possible.

Thanks

KylieS

Donation receipt entity name

KWinter — Thu, 14 Nov 2019 02:04:45 GMT

Hi,

I'm running a charity that is registered with the ACNC and has DGR status. The registration is under the name The Enneagram Movement. We are looking to run a fundraising campaign for an initiative called Enneagram Prison Project Australia. So The Enneagram Movement will be the legal entity supporting the Enneagram Prison Project Australia initiative. We have registered the business name "Enneagram Prison Project Australia" under our ABN.

My question is in relation to receipts for donations. Can we simply use the name "Enneagram Prison Project Australia" on our receipts, or will we need to use the legal entity name of The Enneagram Movement?

Kind regards,

Kyle

religious body and FBT for religious practitioner

willemtwee — Mon, 11 Nov 2019 08:03:05 GMT

Hi. I have read all examples and rules relating to the FBT for religious organisations and practitioners. The situation at hand satisfies all criteria. However my question relates to the extent of what are allowed as FBT tax exempt payments made to the pastor

Are payments made to the pastor all exempt? We keep assuming the man works full time as a religious and qualified person. Like if a credit card was provided to him could any and all costs he incurs in everyday life be regarded as FBT payments to him without tax? And holidays and associated travel is also permissable? (I saw one example where it was mentioned)

If so then such a person could be set up with a stipend of just under the taxfree limit and paid eveything else as an FBT payment. What is the intent of the law on this?

Re: Tax "donation" on homebrand milk?

NateH — Fri, 25 Oct 2019 04:20:34 GMT

Hi ,

Just adding to 's correct answer, the money needs to go to a deductible gift recipient as well.

We have some more information about gifts and donations on our website.

Thanks, NateH

Re: Tax "donation" on homebrand milk?

macfanboy — Thu, 24 Oct 2019 00:21:38 GMT

No, because you received something for it.

Tax "donation" on homebrand milk?

JE4873 — Wed, 23 Oct 2019 23:06:45 GMT

Can I claim the "donation" for farmers on the Woolworths home brand milk on my tax?

Re: GST on Camp Fees

macfanboy — Thu, 17 Oct 2019 00:27:27 GMT

Not sure if you are a church but similar rules should apply:

http://youraccountant.net.au/tguide/guide/gsthbook/GST06040.asp

GST on Camp Fees

SCE — Wed, 16 Oct 2019 22:51:39 GMT

If I had a not for profit organisation that was registered for GST that had a sub entity that ran a camp for children, would the camp fees we charge to the children be GST Free? Could we claim back the GST on the catering and other costs in relation to putting on the camp?

Re: Taxation of superannuation death benefit paid to charity

KeithS — Wed, 09 Oct 2019 09:35:10 GMT

Hello ChrisR

Thank you for your clear and comprehensive reply - you've given me exactly the information needed.

Re: Taxation of superannuation death benefit paid to charity

ChrisR — Wed, 09 Oct 2019 01:50:50 GMT

Welcome to our Community.

The short answer is 15%.

A superannuation death benefit is a payment that a super fund makes to a dependant beneficiary or to the trustee of a deceased estate after the member has died. The payment should be made as soon as possible after the member's death.

If the rules of your super fund allow it, you can nominate the beneficiary for your super with your fund. This nomination may be non-binding or binding. If a binding death benefit nomination is allowed, you can nominate one or more dependants and/or your legal personal representative to receive your super.

For more information about super death benefits, you can check out our website.

If you want your super death benefit to be paid to a charity, you will need to nominate your legal personal representative (the executor of your deceased estate) as a charity isn't a dependant.

As you have already identified, only dependants are entitled to a tax free lump sum death benefit. In turn, the death benefit will have to be taxed at the non-dependant tax rates.

To work out how the lump sum death benefit will be taxed, the super fund is required to calculate the tax free component, the taxable component - taxed element and the taxable component - untaxed element. This information is provided to the deceased estate.

When a lump sum death benefit is paid via a deceased estate to a non-dependant, the taxable component (taxed and/or untaxed elements) is declared as income of the deceased estate. The tax-free component isn't declarable as it is tax-free.

The fact that the non-dependant may be exempt from paying tax is irrelevant as it isn't declarable income for the non-dependant.

The executor of the deceased estate (not the super fund) is required to withhold 15% tax from the taxable component - taxed element and 30% tax from the taxable component - untaxed element and pay that tax to us (there is no Medicare levy). The non-dependant receives the net (after tax) amount.

Hope this helps.

Thanks,

ChrisR

Taxation of superannuation death benefit paid to charity

KeithS — Thu, 03 Oct 2019 07:33:28 GMT

I want to leave my superannuation death benefit (SDB) to an Australian charity.

I'm aware of the general rule regarding taxation of SDBs: broadly, no tax if the SDB is left to a dependent (as defined in the legislation), but tax to pay on the taxable component of the SDB if left to a non-dependent, eg. to a charity.

Ignoring the medicare levy, and ignoring any untaxed element of the taxable component of the SDB, is the tax to pay 15% of the taxable SDB component or is it the lower of 15% and the recipient's marginal rate? If the latter, because the charity pays no tax, does this mean that taxation of the SDB will be 0%?

Thanks for any help the community can give.

Re: tax amendment

NateH — Tue, 01 Oct 2019 01:17:10 GMT

Hi ,

Paper based amendments can take up to 50 business days to process. We don't have access to your records on this platform so we can't say for sure what has happened.

Thanks, NateH

Re: tax amendment

ali786 — Sun, 29 Sep 2019 03:11:21 GMT

Hi,

I am still waiting for my amendment request. I submitted on 31st July. Has ATO received my application?

I done paper based application. It is now nearly 2 months.

Should i assume my application is not accepted for amendment?

Re: Donating on Behalf of Someone Else

NateH — Tue, 27 Aug 2019 22:46:16 GMT

Hi ,

Welcome to our Community! That's a great question!

Deductions can only be claimed by the person who incurred the expense. We have some information on our website talking about gifts and donations and it says that "the person that makes the gift (the donor) is the person that can claim a deduction."

Hope this helps! Thanks,

Donating on Behalf of Someone Else

CuriousOne — Tue, 27 Aug 2019 03:18:56 GMT

If I make a donation in the name of Person A to a registered charity (eg as a Christmas present to Person A) and have Person A's name on the receipt, is Person A able to claim a tax deduction for the donation?

Re: Paid Parental Leave

JodieH — Thu, 01 Aug 2019 02:51:28 GMT

Hi ,

Welcome to our Community!

Salary sacrifice is a private arrangement between an employer and employee. There is no specific tax legislation governing these arrangements, or how much salary can be sacrificed or on which job. An employee's award may however contain provision for a minimum cash salary.

So, if your employee wants to salary sacrifice some of their pay, this would be an agreement between you and the employee and whether they are covered under an award. You can find information about awards with the Fair Work Ombudsman.

Generally, if the employee receiving workers' compensation has returned to work, super is payable. However, if they are receiving workers' compensation and aren't working, no super is payable - unless stated differently in an award. You can find more information about how much to pay and our Checklist: Salary or wages and ordinary time earnings on our website.

Thanks, JodieH.

Re: tax amendment

RachaelB — Mon, 29 Jul 2019 02:30:15 GMT

Hi ,

Thanks for your question!

has provided some great information, though I'd like to provide you with some additional clarification. The request for the extension of time to object should be included with your objection. If we accept your request for the extension, then we will consider the objection.

We suggest you keep a copy of your objection and all supporting documents for your records before submitting them with us.

Hope this helps,

Rachael B.

Paid Parental Leave

LyMai71 — Mon, 29 Jul 2019 02:28:36 GMT

Good aternoon,

Please could you advise whether or not the employee on paid parental leave be entitled for salary sacrifice (deductions).

Also, if staff on worker compensation scheme is entitled for superanuation payment.

Many thanks.

Kind regards,

Re: tax amendment

ali786 — Sun, 28 Jul 2019 08:43:30 GMT

Thanks for your reply. Any idea how to request an extension?

Re: tax amendment

Biggiesmalls — Sun, 28 Jul 2019 03:17:52 GMT

If you want to change a tax return after the time limit has passed you can't request an amendment, but you may be able to lodge an objection. While the time limit for lodging amendments and objections is the same, you can request an extension of time to lodge an objection in some circumstances. See here https://www.ato.gov.au/General/dispute-or-object-to-an-ato-decision/object-to-an-ato-decision/decisions-you-can-object-to-and-time-limits/?anchor=Income_tax_decisions/&anchor=Income_tax_decisions/#Income_tax_decisions/

tax amendment

ali786 — Fri, 26 Jul 2019 00:50:52 GMT

Hello,

I just realised i didnt claim my charity amount for year 2014-2015 and 2015-2016 tax period. I know it is out of amendment period. Can i still object for the extension of period. Is the applicatiion for extension and amendment is having any success results?

Re: Charity Fundraising and Tax.

JodieH — Mon, 16 Sep 2019 06:01:58 GMT

Hi ,

Welcome to our Community!

Whilst we can provide general information here on our Community, what you're considering is a lot more complex and technical. We'd recommend discussing with a registered tax practitioner or contacting our Early engagement team by submitting a request form. An officer will then contact you back to discuss your situation in more detail.

Thanks, JodieH.

Charity Fundraising and Tax.

test123 — Thu, 28 Feb 2019 06:36:46 GMT

I am interested in doing a crowd-source fundraiser to raise money to help students from low-income families / areas get access to tutoring services.

The plan would be to raise the money using an online platform, then use it to pay for education expenses (like pens and books), as well as professional tutors/tutoring companies to provide tuition to the students. So it would sort of be like a scholarship, where the students get access to the tutoring services for free, but the service providers are still getting paid.

In case it is relevant, I would be doing the fundraising myself. I do have an ABN as a sole trader and work within the education sector.

I am planning on raising less than 15,000, so I would assume that I would be exempt from the charitable fundraising act. (Please correct me if I am wrong) Source of my information here.
For legal reasons I would place the money into it's own separate bank account. While the money is in that account and before it is spent, I would assume that it is 'legally' mine since it is under my control. I want to make sure there are no other legal or tax obligations that I am aware of while the money is under my control, before it gets spent on the fundraising objectives (other than the obvious, I shouldn't go spending that money like it was my personal account.)

One big question I have, is there any reason why I cannot provide the fundraising funds to the students directly for the purpose of buying book/pens e.c.t? Or would I be required to buy the materials myself and then offer them to students for free?

I haven't been able to find any legislative information regarding scholarships, so I am also wondering if there is something about scholarships before I start.

Once the money is raised, most of it will be paid to the providers of the tutors / tutoring company. Since I am an organisation that has control of the money, am I required to provide any form invoice or other documentation when I pay for the tutoring? Or would it be considered along the same lines as a regular customer paying for their service?
e.g, If I pay $50 a week to Company A for the tuition of Student A, would it be considered the same as me giving the $50 fundraised money to Student A (whether it be a scholarship or other) and then Student A pays Company A directly? It just gets a bit complicated where I am an organisation paying another organisation for services, but those services aren't related to my organisation.

In a different situation, if I wasn't going to pay a company for the tuition, but pay individual tutors for their time instead, I would assume that it would be feasible to pay private tutors with their own ABN, and it would be similar to the situation mentioned above. I would also assume that there would be no professional relationship between my organisation (and my ABN) and the private tutors with their own ABNs. The individual tutors would then organise their own tax and superannuation requirements as they would if they were conducting tutoring regularly. Again, it just gets a bit complicated where I would be organising a private tutor to come to and provide their services, but technically I am not hiring them in any way. I'm just looking for clarification on this and making sure my assumptions are not incorrect.

My last question: If I was the person organising this, is there any reason why I could not pay myself as one of the private tutors? I would assume that it is similar to the situations above, where I can work under my own ABN and do my own taxes / superannuation required. Then my professional relationship would be between myself and the students/scholarship holders, despite the money being paid from the fundraising bank account to my own bank account. But if there are tax and/or legal problems with this please let me know.

Thanks.

Re: Charity sub entity employing

JodieH — Tue, 20 Feb 2018 04:27:33 GMT

HI ,

Thanks for your patience whilst we received specialist advice regarding your query.

Generally, if the sub entity you've established is only in your records as described as a ”Non-profit sub entity” for GST purposes then the parent organisation is the only one that can pay an employee as it has the only ABN. If the sub entity has been set up in a different way or you require any additional assistance you can phone our non-profit organisation area on 1300-130-248, between 8am - 6pm, Monday to Friday.

Thanks.

Re: NFP (Pbi) and GST

Debbiesap — Mon, 19 Feb 2018 05:08:19 GMT

Many thanks for the detailed explanation and links

Re: NFP (Pbi) and GST

AmandaE — Tue, 09 Apr 2019 05:06:37 GMT

Hi ,

Firstly, huge thanks to for jumping in and helping out while we looked into this for you. We've found some information on GST and GST concessions that might be helpful for the organisations for which you work.

Whether the supply of membership and donation received by the NFP charity is subject to GST will depend on the circumstances of each case. Generally, if the charity is registered (or required to be registered), the goods and services that they supply in Australia are generally taxable unless they are GST-free or input taxed.

As such, membership fees are payments in return for services or rights and therefore will generally be subject to GST.

However, as a NFP organisation, charities may be entitled to certain GST concessions if it is:
a) an endorsed charity by the Australian Taxation Office (check out our website on Is my organisation eligible for charity tax concessions? ), and
b) the consideration of the supply is less than 50% of the GST inclusive market value or less than 75% of the ‘cost of supply’ (for more information please refer to Question 7 of the Specific questions and answers - Charities Consultative Committee Resolved Issues Document).

In relation to the donations, if the donor is making a voluntary payment which can be considered as gift and they don't receive any material benefit or advantage, the donation is generally not considered payment for a sale and thereby not subject to GST. See GSTR 2012/2 Goods and services tax: financial assistance paymentsfor more information on what is considered as gift or material benefits (refer to paragraph 65 to 83, 110 to 114 of the Ruling).

Overall, it’s important to determine whether your charity is registered or required to be registered. If the charity is endorsed you can consider whether the supplies can be considered as a GST-free sales. Check out our website for more information on GST registration, Taxable sales and GST concessions (in particular the section on gifts).

Thanks!

Re: NFP (Pbi) and GST

KYeoward — Fri, 16 Feb 2018 06:49:12 GMT

The section starting "For expenditure incurred" refers to the charity (not the donor).

Re: NFP (Pbi) and GST

Debbiesap — Fri, 16 Feb 2018 06:42:38 GMT

thanks very much for all your help and clarification on subscroptions vs tax deductible donatons. From a tax perspective (both for our charity and the donor) it seems as though donations are more cost effective (we don't have GST Received but can claim GST paid) and the member can claim on their taxes. interesting

thanks again ☺

Re: NFP (Pbi) and GST

KYeoward — Fri, 16 Feb 2018 06:29:41 GMT

Hi - you're right.

Membership subscriptions charged, are subject to GST of 10% (Use tax code GST)

Gifts received (in cash or in kind) are not subject to GST (tax code FRE: 0%)

For expenditure incurred that includes GST, a GST credit of 10% can be claimed,

where the supplier's tax invoice shows the GST (tax 10%. Use tax code GST, except for asset purchases, which have code CAP)).

Where the expense is free of GST - e.g. purchases of fresh food - there's no GST credit (tax code FRE: 0%)

Certain expenses that are input-taxed - such as bank fees - don't get a GST credit (tax code INP: 0%).

Purchases from overseas suppliers have no GST (tax code GNR: 0%) (GNR means "not registered for GST).

Salaries & wages expenses aren't subject to GST (tax code N-T (in Xero accounting, use NR (not reportable))

Hope this helps

Kym Y, Darwin

Re: NFP (Pbi) and GST

Debbiesap — Fri, 16 Feb 2018 05:49:51 GMT

Kym - Many thanks for your quick and easy to understand responses.

Hopefully my last question :-)

I have asertained per the ABN Website that this charity is

- Registered for GST tax

- Australian Public COmpany - Registered as a charity

- And with the exception of these items :

https://www.ato.gov.au/non-profit/your-organisation/gst/gst-concessions/#Gifts

All other items (as per the commerical world) are subject to GST. Including our Membership (which may or may not allow members to volunteer but they derive benefits (such a free emergency services in a different country).

Promise this will be my last question on this subject - appreciate your help and have a great weekend.

Re: NFP (Pbi) and GST

KYeoward — Fri, 16 Feb 2018 05:18:58 GMT

Membership Subscription

- It provides the payer with some form of membership, which will bring some right

- even that of just being a non-voting member.I's therefor a "taxable supply" and GST must be charged on it,

if the organisation is registered for GST.

A non-profit organisation only has to register for GST (and hence lodge a quarterly Business Activity Statement),

if it's annual income from all sources is $150,000 or more. Organisations with a smaller income can still register voluntarily, but they don't have to.

Kym Y, Darwin

Re: NFP (Pbi) and GST

Debbiesap — Fri, 16 Feb 2018 04:42:09 GMT

Kym,

Many thanks for the explanation.

Hope you can please clarify a couple more quesitons re membership subscriptions: (NFP (not sure if that matters)

1. The person giving the donation - can only sit in on AGM's but cannot vote - will the amount still be subject to GST (even though it is called a donation on their form)

2. The only benefit of being a member is they will be entitled to free ambulance service in a different country. No other benefits form part of their membership - Will that still be subject to GST?

Would we have to report these earnings in a quartely BAS return (not sure if regulations differ for NPF organisations)

Thank you

Re: NFP (Pbi) and GST

KYeoward — Fri, 16 Feb 2018 02:53:16 GMT

Hi - Welcome to the Forum !

Membership subscrittions:

- Subject to GST, as they provide the member with service or rights (e.g. the right to vote at membership meetings).

(hence there is a taxable supply of services)

Donations by members:

- Not subject to GST, as no recprocal benefit is provided to the member (as there is no taxable supply)

- Donations of $2 or more are tax deductible for Income Tax purposes, provided the charity

is registered with the ATO as a Deductible Gift Recipient.

Kym Yeoward CPA ACIS

Registered BAS Agent

Darwin

NFP (Pbi) and GST

Debbiesap — Thu, 15 Feb 2018 07:02:34 GMT

I work for a NFP charity. people can either contribute as a member or tax deductible donation. membership allows them to attend AGM.

Are these contributions subject to GST

Re: Checkout charity

JodieH — Fri, 09 Feb 2018 06:10:04 GMT

Hi ,

Welcome to our Community!

We've tried to answer your query in 2 parts. The first part is comprised of the question: When donating to a charity at point of sale, such as a supermarket checkout, can the consumer claim this donation in their individual tax return? For a donation made at point of sale, say at a supermarket, to be deductible to the donor, the:

monetary donation must be $2 or greater;
monetary donation is made to a DGR endorsed organisation;
receipt must state:

the name of the DGR to which the donation has been made. (An abbreviation will be acceptable if the full name of the fund cannot be shown on the receipt. However, the issuer of the receipt may need to publish the abbreviation somewhere, such as on its website, if the abbreviation does not readily identify the DGR).
the ABN of the DGR.
that the receipt is for a gift/donation.

The second part is comprised of the question: Could the collector, ie the supermarket who is passing on the donations collectively claim a tax deduction too? If the collector is acting merely as a collection agent on behalf of a DGR/s, and there is a formal arrangement in place for it to do so, then it cannot claim a deduction on the monies it ultimately “passes on” to the DGR(s) it was collecting for. In this instance, the individual donors will claim the deduction on their individual tax returns using the receipt which contain all of the details itemised above.

However, if the collector is collecting on behalf of a DGR/s of their own accord, and thus there is no formal arrangement in place for it to collect on behalf of a DGR/s, then the donations passed on to the DGR is deductible to the collector only, and not the individual donors. The lack of a formal collecting arrangement will mean that the DGR will recognise the collector as the donor.

Thanks.

Checkout charity

admin — Wed, 07 Feb 2018 02:19:41 GMT

Hello

When donating to a charity at point of sale, such as a supermarket checkout, can the consumer claim this donation in their individual tax return? Provided that they have their receipt, the amount meets the minimum $2, and the charity organistation is "deductible gift recipient" (DGR). Could the collector, ie the supermarket who is passing on the donations collectively claim a tax deduction too?

Thanks

Re: Charity sub entity employing

JodieH — Mon, 05 Feb 2018 07:04:50 GMT

Hi ,

Thanks for getting in touch!

We've contacted a specialist area to seek some further advice regarding your query. We hope to get back to you with some further information as soon as possible.

Thanks.

Charity sub entity employing

Paulbash3 — Wed, 31 Jan 2018 00:09:33 GMT

We run a charity that has opened a sub entity to run a cafe. All profits go back to the charity and it is really just a sub entity for the purpose of GST and also to claim employment incentives from QLD government. My quesion is if the sub entity employs people can the parent charity just pay them on their payroll and payg?

Re: Working for a NFP Charity

AmandaE — Wed, 03 Jan 2018 00:32:46 GMT

Hi ,

Thanks for joining our Community!

Pay as you go (PAYG) withholding obligations for not-for-profit organisations are the same as for businesses. If you're an Australian resident for tax purposes, the first $18,200 of your yearly income isn't taxed. This is called the tax-free threshold. You can claim the tax-free threshold to reduce the amount of tax that is withheld from your pay during the year by answering 'Yes' at question 8 on your Tax file number declaration form.

A salary sacrifice arrangement is where an employee agrees to forego part of their future entitlement to salary or wages in return for their employer providing them with benefits of a similar cost (to the employer). This is an arrangement between you and your employer - your employer may be liable to pay fringe benefits tax on your salary sacrifice, so you'll need to discuss your options with your employer. There's no restriction on the types of benefits you can sacrifice, as long as both you and your employer agree - check out some examples of types of salary sacrifice arrangements on our website.

Hope that helps!

Working for a NFP Charity

Debbiesap — Wed, 27 Dec 2017 04:41:23 GMT

I have been advised that one of the benefits of working for a NFP is the I can treat the first $15,000 of my income as tax free.

I am not sure if I fully understood but wondering if this is the same as any Salary Sacrifice options available to employees in a commerical company, and if not how do they differ.

Addtionally, is there a list of items that I may Salary Sacrifice (I am assuming it is a restricted list - i..e I cannot salary sacrifice my levies or groceries.

Ty.