Listening. It’s something I’ve really had to practice over the years so that I’m an active listener. If you google ‘active listening’ there are different threads that outline multiple criteria. The thread that best resonates with me is attitude, attention, and adjustment, or the 3 As.
Many years ago, I undertook the Myer-Briggs personality assessment. I was assessed as an ENFP; with strong traits correlating to extroversion, intuition, feeling and perception. The opposite traits to mine are introversion, sensing, thinking and judging. This assessment fascinated me so much that I became an accredited assessor and over the years used the tool to help others. One of the most insightful observations from the assessment is that irrespective of what your ‘innate’ personality is, you can learn other traits. By way of example, consider if you are right-handed and suddenly that ability was taken away from you. You might at first have difficulty using your left hand, but over time you would become proficient. In many ways the speed at which you become proficient might depend on your attitude, attention, and adjustment.
It would seem then that the 3 As may have a broader application beyond active listening. For me these 3 As are central to being a responsible citizen and authentic leader.
In all my roles, I’ve made it a priority to model positive elements of the 3 As. This has assisted me in overcoming obstacles and barriers that at first might seem too daunting.
Lately, we’ve received some feedback about the new reporting obligations that impact the majority of NFPs. As many of you know, from 1 July non-charitable NFPs that have an ABN and self-assess as income tax exempt are required to lodge an annual NFP self-review return to notify us of their eligibility to one of the 8 categories outlined in tax law.
When I recently spoke about the new requirements at a forum, I heard that many NFPs were surprised, and even annoyed about the new reporting requirements. There were organisations in the audience which had never been entitled to self-assess as income tax exempt, had never considered their tax status, or engaged with the ATO. In addition to that annoyance, I sensed a general fear of ATO repercussions where organisations were concerned they’d made a mistake.
It was important in that moment that I listened to what people were saying, provided general guidance, reassured organisations, and followed up on the enquires captured to ensure my team made contact and provided further support. Reflecting after the session, I believe I listened with a positive and enquiring attitude, paid attention to circumstances suggesting appropriate ways forward, and adjusted my delivery of key messages based on the feedback received.
Attitude
Of course, a positive attitude does not only benefit the regulator; it also helps the taxpayer achieve what they need to.
We know most not-for-profits try to do the right thing. We appreciate the important role NFPs have in the Australian community and the critical role volunteers play.
I have a message for all NFPs who to date have assumed they were automatically exempt from income tax or have not kept their organisations details or governing documents up to date. Check out our website, watch our webinars or call our 1300 130 248 dedicated support line for NFPs to find out what you need to do. It may take a little time, but I can assure you we will work with you to get it right.
Attention
Paying attention is important because it frames our responses and our ability to effectively engage.
As the regulator we’ve paid careful attention to communicating the new reporting requirements. We’ve been communicating since 2022 via sector forums, via the media, our website, and this newsletter. We’ve also engaged with our NFP sector networks and ATO stewardship groups in the design, development and testing of the return, public advice and guidance and transitional arrangements.
We issued two ATO letters in 2024 to ABN registered NFPs in April/May and July/August. The first was to officially notify of the new reporting obligation and the second letter was to advise that the return was ready for lodgment.
Notwithstanding our communication efforts, some NFPs feel they have not had enough lead time to get ready, or they aren’t sure how to complete the self-review return.
We empathise and we understand. To make it easier for you, we streamlined the NFP self-review return so we’re only asking for information that NFPs should already have at hand – organisational details, and purpose. You can find out further information through:
- updated public advice and guidance on our website at www.ato.gov.au/NFPtaxexempt
- videos on our ATOtv channel about how the new reporting requirements apply, at tv.ato.gov.auExternal Link
- our NFP Advice Service on 1300 130 248 which provides technical advice for NFPs and their representatives, Monday to Friday, 8:00 am to 6:00 pm AEDT.
Adjustment
Making adjustments can lead to better outcomes.
To address feedback and make it easier to engage with the ATO, we extended the lodgment due date up to 31 March 2025 and NFPs do not need to contact the ATO to receive this extra time. However, NFPs do need to determine if they need to make an adjustment to be ready to lodge. This can include:
- NFPs who need to update their authorised contacts can use the downloadable ‘Change of registration details’ form we’ve made available to make it easier to request an update of contacts.
- NFPs who are not yet ready to lodge their self-review return online can lodge their return through our self-help phone service on 13 72 26.
- NFPs that either have, or are unsure if they have, charitable purposes benefit from our efforts to streamline the NFP self-review return to accept lodgment from potentially charitable NFPs. We will work with these organisations and the ACNC post-lodgment to determine their tax status.
- NFPs that are ineligible to self-assess as income tax exempt can still lodge the return, and we’ll work with them to get their status right going forward.
- NFPs with a taxable outcome on their NFP self-review return can use the ATO provided concessional due date of 15 May 2025 to lodge their income tax return, pay any income tax liability or notify us they don’t need to pay using a non-lodgment advice.
- NFP companies that have taxable income below the $416 threshold will soon be able to use a new non-lodgment advice proforma to make it easier to notify the ATO.
Our adjustments have been made in good faith to support NFPs in meeting their obligations.
Here are the top 5 tips from my staff who have successfully supported thousands of NFPs:
- Don’t delay your lodgment – The NFP self-review return can be lodged in Online services for business or alternatively, a registered tax agent can lodge in Online services for agents on behalf of an NFP. You can also lodge using our self-help phone service on 13 72 26. Find out more about all three options at How to lodge the NFP self-review return.
- Prepare for lodgment by visiting the NFP self-review return question guide to prepare your answers before attempting to lodge the NFP self-review return, especially if you’re lodging using the self-help phone service.
- Review your governing documents/constitution to ensure the purpose remains true and consistent to the activities and operations of the NFP organisation. This is key to self-reviewing eligibility to the income tax exempt category that is relevant.
- Call us on 1300 130 248 if you have questions or you’re having trouble navigating the process.
- Don’t panic if you’ve made a mistake, we’re here to help.
Other news
Treasury has invited feedback on the Taxation Administration (Community Charity) Guidelines 2024 exposure draft. The exposure draft was released for public consultationExternal Link on 5 November 2024. The guidelines apply to deductible gift recipients (DGRs) under the community charity categories. Community charities will be required to follow the guidelines to receive and maintain DGR endorsement.
The guidelines outline requirements for:
- governance
- record keeping
- allowed activities.
Consultation closes on 3 December 2024.
Closing thoughts
About 14,000 NFPs have already lodged their inaugural self-review return. How is your organisation tracking?
As we approach the end of 2024, make some time to check your organisation’s contact details are up to date, find your governing documents and lodge your NFP self-review return. Like a right-handed person learning to write with their left hand, this first year may be a bit bumpy, but it will smooth out in the end.
With the right attitude, attention, and adjustment your NFP can get on with its purpose.
Remember, we’re a phone call away if you need us.
Take care and stay safe.
Jennifer