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P&C Accounting Manual > Procedures and Processes >

Tax registration

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Registration for an Australian Business Number (ABN)

All P&Cs must obtain an ABN.

All P&C stationery, purchase orders, receipts and invoices must show the P&C's ABN. Where a P&C makes a supply to another business and does not provide its ABN then the other business is required to withhold 48.5 per cent of the amount payable to the P&C in tax if the P&C does not provide its ABN.

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Registration for Income Tax Exempt Charity ( ITEC ) endorsement

All P&Cs must apply to the ATO for an ITEC endorsement. Details are in the ATO's publication Charity Pack A taxation guide for charitable institutions and funds. If you do not apply for an ITEC endorsement, the P&C may have to pay income tax on profits.

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Deductible Gift Recipient ( DGR ) endorsement

DGR status enables the P&C to receive donations and donors to receive tax deductions.

P&Cs are eligible to establish tax deductible funds only for building funds, nothing else. You must obtain an endorsement (and have an ABN ) before you establish your fund.

When you obtain your endorsement, the ATO will require you to provide details of the rules under which you will be administering the DGR because certain clauses should be included within your constitution. Obtain the wording from the Queensland Council of Parents and Citizens Associations ( QCPCA ) or Executive and Legal Services Branch within Education Queensland (tel: +61 7 3237 0485). The amended constitution will need to be approved by Executive and Legal Services Branch.

Separate bank accounts must be established for DGRs.

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Registration for Goods and Services Tax (GST)

P&Cs who meet the annual turnover registration threshold of $100 000 must register for GST and submit a Business Activity Statement (BAS) every quarter.

P&Cs that do not exceed the $100 000 turnover threshold may register for GST. However, you should conduct a cost/benefit analysis to decide whether this step is worthwhile.

For example, you could review the activities of the P&C to see if any activities could be administered by the school. This step could keep total P&C turnover, excluding tuckshop and one-off annual event fundraising turnover (such as fete income), below $100 000 and thus preclude the necessity for GST registration.

A P&C registered for GST must issue a tax invoice for taxable supplies when the recipient requests one.

If you have any queries about GST registration, do not hesitate to get expert advice.

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Completing an activity statement

All accounts must be reported on every month. This information is then reflected in the quarterly activity statement to correctly show the P&C's activity for the three-month tax period.

Note: There are two types of activity statements:

The ATO will send a personalised activity statement (IAS or BAS) at the end of each quarter.

P&Cs are legally obliged to return the activity statement within the prescribed period of 28 days after the end of the quarterly tax period. Penalties now apply for late submission. This means the activity statement is due to be lodged on or before 28 October, 28 January, 28 April and 28 July. The activity statement must reflect all appropriate (for GST-registered P&Cs note that the activity of non-profit sub-entities (NPSEs) are not included on the BAS) receipt and payment transactions for the quarter.

P&Cs report GST using cash accounting. The BAS form records (for GST) the supplies and acquisitions made, the resulting GST debits and credits, PAYG liability and calculates the net effect that is then paid to or by the ATO.

All appropriate transactions relating to the quarter must be taken into account for the BAS. Transactions cannot be delayed until the next BAS just for convenience. You may need to arrange meeting times so that subcommittees can meet just before the monthly P&C meeting to facilitate the flow of reports from the subcommittees back to the main P&C body.

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Choose whether to operate the tuckshop/canteen as input taxed

A GST-registered P&C may choose to have all supplies of food and drink (only) through the tuckshop treated as input taxed. These input taxed transactions are then included on the P&C's BAS.

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Non-profit sub-entities (NPSE)

If you do decide to register for GST, you may also want to take advantage of the non-profit sub-entities ( NPSE) provisions of the GST Act.

An NPSE is a separately identifiable activity of the P&C, such as a uniform shop, tuckshop, swimming club, or book club.

An NPSE should not be confused with a subcommittee, which is a group of people directed by the P&C to support and supervise certain activities, although a subcommittee may in fact run an NPSE.

Where an NPSE's turnover is equal to or more than $100 000 the P&C must choose whether to have its transactions incorporated onto the P&C's BAS or separately register it for GST. It is recommended that you fold it back into the P&C's BAS so as to reduce the workload of the Treasurer. If an NPSE registers it will have its own ABN and GST registration and produce its own BAS. It ceases to be an NPSE when it registers for GST.

It is not recommended that you elect for your Outside School Hours Care (OSHC) service to be an NPSE. Childcare is a GST-free supply, so users do not pay GST. However, the GST legislation allows input tax credits to be claimed on purchases that the unit makes. Another option is to separately register the OSHC service for GST.

Note that the OSHC cannot register for PAYG for the employees. This role remains with the P&C.

If you have any queries about NPSE decisions, seek expert advice from the QCPCA.

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Managing NPSEs

The P&C may pass a motion at a duly constituted P&C meeting to elect to use the NPSE provisions in Division 63 of the A New Tax System (Goods and Services Tax) Act 1999 (the GST Act). Where the Division 63 election has been made the activities of the NPSE are deemed to be those of a separate entity for GST purposes only. The P&C must be registered for GST for the NPSE to exist.

NPSEs must be separate by the nature of the activity and be separated financially to clearly define transactions that belong to the NPSE. A separate column or cost centre is sufficient. An NPSE does not require a separate bank account, although a separate bank account may be advisable for outside hours school care.

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Registration for Pay As You Go (PAYG)

If your P&C has employees it is required to register for PAYG. If your P&C is registered for GST, remittances of tax deducted from employee wages are included in your BAS. If the P&C is not registered for GST, you need to complete an Instalment Activity Statement (IAS), which is sent out quarterly by the ATO.

Since subcommittees are not legal entities and should not have employees, all employees must be listed on one BAS or IAS submitted and paid by the P&C.

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Summary of requirements

These checklist summaries will help you to make sure you are complying with the law to your best advantage.

P&Cs not registered for GST

P&Cs registered for GST with NPSE with turnover under $100 000

P&Cs registered for GST with NPSE with turnover more than $100 000

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GST advice

You can get GST advice from the following sources:

QCPCA tel: +61 7 3352 3900
ATO tel:13 28 66
Education Queensland's (EQ) senior finance officer in your district
EQ's Corporate Taxation Unit tel: 1300 656 380/fax: (07) 3299 1767

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