Question:
Charities: “deer” in bureaucrats’ telescopic sights
Answer:
Recent changes are outlined below:
July 1, 2022
- Loss carry back for eligible companies extended to cover 2023 income year.
- Professional firm profits diverted to the professional's spouse or other associates to be reviewed under new Tax Office guidance.
- Corporate collective investment vehicle legislative regime introduced.
- Temporary full expensing of depreciating assets extended to include 2023 income year.
- Depreciable assets of a company joining a tax consolidation group have tax costs setting rules modified for assets depreciated under temporary full expensing rules.
December 9, 2021
- Reduced Pandemic leave disaster payment of $750 per week made available through to 30 June 2022.
August 5, 2021
- COVID-19 Disaster Payments are non-assessable non-exempt income in 2021 income year and later. Payments phasing out as vaccination rates increase.
July 1, 2021
- New Investment Engagement Service launched for businesses planning significant new investments in Australia.
- Tax Office small business independent review service made permanent for businesses with turnover < $10m, for income tax, GST, exercise, luxury car tax, wine equalisation tax and fuel tax credits. Requested before amended assessment issued.
- Small business income tax offset for individuals increased to provide a reduction of 16% for a tax payable up to $1,000.
- Self-managed superannuation funds can now have six members, increased from four members previously.
July 1, 2021
- Some COVID -19 state and territory business grants received by small and medium enterprises are non-assessable, non-exempt income for 2021 and 2022 income years.
- Certain state, territory and local government financial support for individuals and businesses suffering COVID-19 impacts made exempt where businesses have turnover less than $50 million and only in eligible programs.
March 31, 2021
- JobKeeper payments scheme ended.
October 5, 2020
- Boosting apprenticeship commencements subsidy (up to 50% of apprentice's wages) is assessable income.
June 4, 2020
- Homebuilder grant for new home or substantial renovation construction is not subject to income tax.
April 1, 2020
- COVID-19 cash flow boost payments are not subject to income tax
The burden of new charity regulations could lead to smaller not-for-profit organisations closing up and turn civic-minded people away from involvement in philanthropic organisations. Draft legislation to intensify regulation of charities was released in December last year together with a consultation paper which focuses on implementing the new rules.
In the 2011/12 Budget (announcements in May 2011), the Government spruiked reform of the not-for-profit sector and allocated $50 million to establish The Australian Charities and Not-For-Profit Commission (the Commission) with the following objectives:
+ Establishing a national “one-stop-shop” regulator for the not-for-profit sector… to remove the complex regulatory arrangements currently in place and streamline reporting…;
+ [Implementing] harmonisation and simplification between Commonwealth State and Territory Governments on not-for-profit issues, including regulation; and
+ Reducing red-tape for Government funded not-for-profit organisations…
The Government also plans to reform taxation and regulatory policy settings and introduce a statutory definition of a charity.
The December draft legislation and consultation paper provides for the following changes after the legislation goes through Parliament:
+ All income tax exempt charities will need to register with the Commission;
+ Financial reports (prepared with complex full accounting standard procedures) for Deductible Gift Recipient organisations and other charities with revenue more than $250,000 per annum, must be lodged with the Commission;
+ Implementation of a “responsible individuals” concept for all charities including non-incorporated organisations allocating responsibilities to those people that would be similar to the responsibilities of a company director;
+ Transferring regulation of charitable companies limited by guarantee from ASIC to the Commission;
+ Requiring record-keeping to prove the charity is complying with its objectives (subject to the auditor confirming that in his documented opinion); and
+ Requiring full audit for charities turning over $1 million and an auditor’s review for charities turning over between $250,000 and $1 million.
The plan is [was] for the new regime to be put in place for the year ending 30 June 2013. Charities will need to have systems in place from July 2012. Submissions on the draft legislation and paper should have been made before 27 February.
The draft legislation will need to be approved by both Houses of Parliament and if/when that occurs, charities should look at implementing new systems for the financial and statutory reporting requirements.
There are also a number of changes to Accounting Standards mooted by the Australian Accounting Standards Board which will directly impact some charities. Those changes include new rules on income recognition, service performance (reporting thereof) and disclosure of control issues.“There’s nothing that does so much harm as good intentions”.
Renowned Economist Dr Milton Friedman.
WTB 2012/33
STOP PRESSThe Government has deferred the start of the new Commission because of adverse feedback from the not-for-profit sector.
