Most not-for-profit businesses can self-assess their INCOME tax status.  (That is, whether they have to lodge a tax return)

 

Types of organisations that are exempt from tax include:

 

A non-profit organisation is an organisation that is not operating for the profit or gain of its individual members, whether these gains would have been direct or indirect. This applies both while the organisation is operating and when it winds up.   Any profit made by the organisation goes back into the operation of the organisation to carry out its purposes and is not distributed to any of its members.

This requirement is to be shown in the Constitution of the organisation.

 

Some organisations must pass one of three tests to be exempt from income tax. The tests are the:

As well as comply with all of the substantive requirements in its governing rules (constitution), and

Apply its income and assets solely for the purpose for which it is established.

 

Not for Profit Organisations should review their tax status with the following document and keep it on their records and review it each year. Diagram from: https://www.ato.gov.au/Non-profit/your-organisation/do-you-have-to-pay-income-tax-/income-tax-exempt-organisations/ 

 

GST came in during 2000.  Many goods and services have GST, which is 10% on top of the price of the goods and services.  It is a requirement that if you advertise your services, that you promote the GST inclusive price, so that you do not get caught under the Fair trading laws. – for most businesses, roughly 95% of all suppliers’ invoices will have GST on them.  If you are a not for profit organisation, you are not required to be registered for GST until your turnover (income) reaches $150,000.  However, if you are applying for some grant funding (eg LotteryWest), you may be required to be registered for GST in order to access more funding opportunities. 

 

When checking how much GST is included in an invoice, you divide the total invoice by 11.  This will give you the GST amount.

 

If you are registered for GST, you are required to lodge Business Activity Statements (BAS).  If you are registered for GST voluntarily (ie as a not for profit, your turnover is under $150,000) you can elect to lodge your BAS annually.  For all other small businesses, you are required to lodge your BAS at least quarterly.

 

Also, on your BAS you may be required to pay PAYG Withholding if you have employees.  This can be paid quarterly or monthly, depending on how many employees you have.

 

Keep your committee details up to date with the ATO via the Australian Business Register: www.abr.gov.au.  Use https://abr.business.gov.au/ to find ABNs.