There are more than half a million not-for-profit (NFP) organisations in Australia and more than 55,000 registered charities. Many of these organisations are eligible for a range of tax benefits and may also qualify for exemptions or rebates on fringe benefits tax, as well as GST concessions.
As a NFP, these benefits can allow you to use money that would otherwise go to the ATO and reinvest it into your organisation. But when it comes to tax reporting, there are some important things to remember.
What BAS looks like for not-for-profits
Like any business, NFPs and clubs are still required to lodge activity statements. These statements allow you to report and pay your PAYG (instalments and withholding), fringe benefit tax (FBT) instalments, GST and other relevant tax obligations.
What this looks like in practice is you’ll receive a personalised activity statement to complete and lodge with the ATO, depending on your lodgement cycle you may need to lodge monthly, quarterly or annually. Speak to a solutions expert to find out more.
If you’re required to lodge your activity statements quarterly, the following deadlines apply:
- Q1 (July, August and September) - 28th October
- Q2 (October, November and December) - 28th February
- Q3 (January, February and March) - 28th April
- Q4 (April, May and June) - 28th July
For those that need a bit of extra time, consider getting some professional help with your reporting, as later lodgment and payment dates may apply if you lodge through a tax agent.
Alternatively, if you’ve been asked to report monthly, your activity statement and payment will be due on the 21st of the next month. And finally, if you’re required to report and pay annually, this will happen at the same time as your income tax return.
Income tax exempt organisations
Many not-for-profit organisations are exempt from income tax. If your organisation is not a charity and falls into one of the following categories, you may be exempt:
- Community service organisations
- Cultural organisations
- Educational organisations
- Health organisations
- Employment organisations
- Resource development organisations
- Scientific organisations
- Sporting organisations
If you need help working out your tax exempt status, please discuss with a solutions expert at your initial appointment.
Tax return pitfalls
If your NFP is required to lodge a tax return, there are a few common mistakes to be aware of and avoid:
Make sure you fill out all relevant dates for your tax return. It seems simple but it’s a common error in many NFP tax returns that leads to delays in lodging your return.
You are required to list the most appropriate code for your main business. Getting this wrong could result in being selected for audit unnecessarily
Selecting the right company status is important as it determines your tax rate. If you’re a non-profit company, make sure you select D3 Non-profit, and if you’re a non-profit in the ‘other taxable companies’ category, select D10 Public.
Income and expenses:
Be sure to include receipts and double-check your expense figures, as making a mistake in this section can result in being taxed an incorrect amount, or even being audited.
Our team at Bookkeeping.Solutions is well versed in working with NFPs and clubs to prepare and lodge Activity Sheets directly with the ATO. Our professional support will give you confidence and peace of mind, so you can focus your time and efforts on your organisation and not your books.
No matter if you’re a footy, cricket club, or any other NFP we offer a range of affordable and customisable services, providing expert GST advice, monthly and annual reporting, BAS preparation and lodgement, payroll processing and more. We can even come to you! Contact our friendly team for an obligation-free appointment today on 1300 039 189.