Thank you to all the Treasurers who submitted their Year End questionnaire by the due date. This really helps us in putting the Group Accounts together that are required to be a charity and for grant providers. If you are not yet finished and need help, please get in touch with us at [email protected] as soon as possible. We have had a lot of queries already, especially about fixed assets. I think it is great that so many Treasurers are asking questions as it shows their commitment to getting things in top shape going forward.
I’ve had several queries lately about GST. If your Centre has income greater than $60K p.a. (either in the past year or expected in the next year) then you need to be registered for GST. Here are a couple of answers to frequent questions:
- Can I net off the bulk funding we receive from MoE with the levy retained by Playcentre Aotearoa so that we are under the threshold? No, our auditors require us to show these items separately (“gross”) and this sets the basis for the numbers that IRD will look at when they determine turnover.
- Can I de-register for GST if our income has fallen to below $60K? Yes, you can, but there are some traps. When you de-register for GST you have to pay GST on all your fixed assets at their market value. Have a look in your fixed asset register and you might get an idea of the amount of extra GST you might have to pay (though you can’t use your book value, you have to go through a process of working out the market value). Will the money you save be enough to make up for this cost? Consider also that you may have to re-register for GST if you income goes over $60K p.a. in the future. Will the IRD then pay you back the GST on the fixed assets? No, they won’t. You definitely want to avoid “yo-yoing” in and out of being GST registered as this will be very expensive. If you are thinking of de-registering, send us an email so we can help you make the decision.
We have also received a few queries about investments. Interest rates for term deposits are pretty low right now, and some Centres are looking for alternatives that give a better return. An important principle to keep in mind is that High Reward = High Risk. If you see an investment that has high return but doesn’t seem to be high risk, look closer, as the risk may be hidden in the fine print. If you have any doubts about a potential investment, get in touch and I’m happy to have a look at it for you. Remember also that the Finance Policy requires Centres to seek advice from Finance before investing outside of bank institutions.
To cut down on administration, we are now giving Centres the opportunity to pay for their Xero Standard package annually. If you can commit to using your Xero package for the whole year (no change in package) then we can invoice you in November for the whole year. Let us know if you want to do that on [email protected] Another option for saving time that we are offering to Centres is to pay for invoices (e.g. Wages) by Direct Debit. So far we haven’t had enough Centres take up this option to get it going, as our bank requires at least 100 to start it. If you would like to pay by Direct Debit, let us know on [email protected] and we will implement this when/if we have 100 Centres signed up.
Later in the year I would like to create some new training and support materials for Treasurers, perhaps including a video. If you have something specific you would like covered in this that doesn’t seem to be on the website already (or is unclear), let us know on [email protected] so that we can start planning this.