ATO issues further advice to NFPs on self-review return
The Tax Office has provided not-for-profits with tips for lodging the self-review return through ATO's phone service and other details about its compliance approach.
In an update last week, the ATO said while not-for-profits are starting to lodge their self-review returns and update the details and governing documents, the ATO still wants to see this lodgment action increase further on this front.
Under new reporting requirements, non-charitable not-for-profits with an ABN are now required to lodge an NFP self-review return to notify of their eligibility to self-assess as income tax exempt. The return is an annual obligation for the 2023–24 income year onwards.
ATO assistant commissioner Jennifer Moltisanti said she was pleased to report that around a month into Tax Time 2024, the lodgement of the new NFP self-review return has been "working as intended".
"We're seeing many NFPs lodge the return using online services for business, which is very pleasing. We've also noted an uptick in NFPs updating their details and governing documents," Moltisanti said.
"While lodgments are steadily increasing, I’d like to appeal to NFPs that are still waiting to lodge.
"Using a competitive sporting analogy: discipline and support have kicked off, but we need to spur on action."
Moltisanti said to help NFPs meet their tax and super obligations, the ATO has provided information through a range of channels including its website, ATOtv channel, NFP advice line, Online services for business, Online services for tax agents and its self-help phone service.
Tips for lodging self-review return by phone
Moltisanti said the ATO is seeing NFPs stop part-way through their call and phone again once they've done further preparation when trying to lodge through the phone. The ATO has issued tips for lodging the NFP self-review return by phone to help avoid this.
The ATO said NFPs should review the questions in the return in advance and write down answers before the call. This includes determining which category best reflects the main purpose of their organisation.
Callers should also be ready to enter their NFP organisations ABN.
"If you're unsure of your organisation's ABN, you can use ABN lookup to find it," the Tax Office said.
"You cannot use your individual or personal ABN, even if you have one."
The ATO said NFPs would also need to enter a reference number to verify that they are authorised to lodge.
"You can find an ‘Our reference’ number at the top of any letter from us sent to your NFP organisation," the ATO said.
"‘Our reference’ numbers are long, so don’t worry if you don’t enter it correctly on the first go. You can have multiple attempts to enter it."
Moltisanti said if an NFP doesn't have a letter from the ATO with an 'Our reference' number listed, they can call 1300 130 248 to update their NFP's postal address and the ATO will re-issue them with a new letter.
"If you get stuck at any point, you can access the automated support by stating ‘help’."
Practical compliance approach
Moltisanti said the ATO considers this first year of reporting a transitional year and would be focused on helping NFPs get their reporting right.
"So, if you’ve made a mistake, or need more time, you don’t need to panic," she said.
She reminded NFPs that the ATO is providing additional time to lodge the NFP self-review return up to 31 March 2025.
For taxable NFPs with a taxable income greater than $416, the ATO said it would provide them with a concessional due date to lodge their income tax return, pay any income tax liability, and remit any applicable general interest charge and penalties.
"You can also enter into a payment plan to allow any income tax liability to be paid progressively," the Tax Office said.
"If you're a taxable NFP with a taxable income less than $416 we'll soon be [releasing] a ‘non-lodgment advice’ product you'll be able to use to notify us of a 'return not necessary'. In the meantime, you can notify us by phone or in writing including the non-lodgment advice information listed at ato.gov.au/taxableNFPs."
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