Friday, 23 May 2014

Donation payments


IRD looks at ‘donation’ payments to private schools

Inland Revenue looks at ‘donation’ payments made to a handful of private schools

Inland Revenue has issued a Revenue Alert regarding payments being made to a small number of private schools and private childcare centres. The payments are being re-characterised as donations to charitable trusts, enabling people to make false claims for donations tax credits.

This issue applies to a very small number of private schools and private early childhood care/education facilities, Inland Revenue Group Tax Counsel, Graham Tubb said today.

“This is not about donations paid to state or integrated schools,” he said.
“The large majority of people and organisations do the right thing in regard to making donations and claiming tax credits.

“But Inland Revenue is aware of cases where fees paid to private education centres or the charitable trust that owns them, are being characterised incorrectly as donations or gifts.

“A payment of five dollars or more to a charity qualifies for a donation tax credit, but it must be made voluntarily, benefit the particular charity, and provide no material benefit in return.

“The Commissioner’s view of the arrangements identified so far is that such payments are not a gift or a donation. They are a fee that parents or caregivers pay for receiving education or childcare services and the centres often rely on these fees to meet their business costs.”

Mr Tubb said the payments are incorrectly described as donations in order to allow those paying them to claim a donations tax rebate to which they may not be entitled.

Another outcome of such an arrangement is that the educational centre does not return the GST on the fees.

“It is important that both parties involved in these arrangements understand the rules and that Inland Revenue will take action in cases where they have been broken.

“If a taxpayer has claimed donations tax credit, or taken a position which is incorrect for GST then that position should be corrected. Our message is that we encourage our customers to talk to us or their tax advisor if they are unsure of the rules or make a voluntary disclosure if required. We have set up an email address -RevAlertEducationCentres@ird.govt.nz – for people to ask for donations tax credit claims to be changed so they can repay any over-claimed tax credits or for the education centres to make voluntary disclosures regarding any unpaid GST. ”

The Revenue Alert is online athttp://www.ird.govt.nz/technical-tax/revenue-alerts/revenue-alert-ra1401.html



  1. Hi Laurie - I am missing the point of this post, please explain??

    1. That's exactly the point - No donation rules have been broken by the PBCC.
      Another pointless post - Excuse the pun!

      Frank Lee

  2. The Questioner25 May 2014 at 08:37

    Mr Lee - did anyone other than you mention PBCC/EB breaking rules? There are, however. some reasonable questions to be asked.

  3. No rules have been broken so - Questions about what exactly?
    Frank Lee

    1. Questions like - can Bruce Hales shag any follower's wife without question - like JTJr did? How does Jenny feel about this? I suppose she doesn't have a say, just like Renee didn't? Have a look at yourselves peeps.


    2. Frank.There is still questions that can be asked.And it is not necessarily a pointless post, even when rules have not been broken. This is normal everyday practice,especially outside of cults

      For instance.There never used to be any rules against bully tactics.And years ago,there was no such thing as rape within a marriage setting.

      People had discussion and questioned these practices.And then decision were made to apply rules against rape within marriage settings, and against extreme practices of bullying

      So you can see.Rules don't necessarily need to have been broken.For certain subjects to still be thought of some great interest.

      This might not often occur within cult settings.Due to cults being run by dictatorships.

      But outside cults, it considered quite normal practice, for people to be allowed to discuss and question anything

      Why not pass this information on to Bruce Hales.Start spreading the good news

  4. Blogs are not just for pointing out broken rules - they are also for providing information and news. It is then possible, if we wish, to have a bit of a discussion about them. Laurie's blog's function in life is not to just point out broken rules. It provides us with something to discuss and during the discussion we may well find a few broken rules.

    It seems to me that paying school fees by donating money is a bit suspect - if all private schools did it this way what would happen?

    1. So if you think it's suspect Jill, why don't you ask the PBCC instead of sowing misinformation about things you have little knowledge of?
      Discussion is ok when you have the facts. Also, what information are you referring too?

      I suggest you are a dirt digger who has nothing better to do with her time.

      Frank Lee

    2. Michael Bachelard in his book Behind the Exclusive Brethren explains quite cogently how this process works. It is good that the Inland Revenue are investigating. One might say about time too. If this is the model followed by other groups, and I couldn't possibly know, then all the more reason to examine what is happening.
      I'm sure the Revenue have their own procedures to follow and will take no notice of my opinion, or Jill's comments, or even the wise words of Frank Lee.


  5. The Questioner27 May 2014 at 14:32

    What about this for a start, Mr Lee? School fees are not tax deductible. So, make school free but get parents to make payments, tax deductible, to an education charity which then pays for the school. Neat but questionable.

  6. Definitely questionable and a loop hole someone should close if it is legal at the moment

  7. I resent wealthy business/religious groups, and individuals, using schemes to avoid paying tax to fund our vital services and infrastructure. They do nothing to benefit me, or the wider society. Most workers do not have this "flexibility" and pay the full amount.

    At least, some international corporations offer a service and a good deal (for example, for the price of a beverage, I can have a space to sit and read/work, for as long as I wish to remain, in one of our branded coffee emporiums).

    Methods of abuse should be examined, discussed and, if necessary, investigated. Digging out the dirt is what it is all about!