Unconditional – it’s what it means
Let’s (briefly) talk about tax ( and education). Again – yes I know.
The headline of today’s Dominion Post showed that in 2015 schools collected $11 million in donations more than they had previously. Now dear readers after And another thing you all know that this means that of the extra $11 million the government subsidied this by a third.
Also interesting if you follow the embedded Stuff links you see that decile 10 schools dominate the donations stakes. By about $329 million to $2.8 million. Mega yuck given this just happens automatically and doesn’t go through Parliament every year as Education budget does.
Now this we have discussed before and promise I am not interrupting your Saturday to moan again about that.
The reason for this postette is the reference to how music lessons and school camps and the like are now being reclassified as donations.
No just no.
IRD guidance is very clear that donations need to be an ‘unconditional gift’. Nothing in return. A cash version of seva although they will probs never use that analogy.
The law is very clear and any ‘reclassification’ will be very easily overturned by the department. Please apply your brain. If you get anything in return – it ain’t a donation and so no donations tax credit.
Simple. Please carry on.
And another thing
Let’s (briefly) talk about tax (and donations to schools).
Following Monday‘s post I got to think about the other ‘advancement’ head of charity – education.
Now there is the whole controversy about whether donations that schools seek are really for extras and their role in an education system that is supposed to be free. And there is the thing about decile funding that the government gives less to higher decile schools coz they can fund raise.
But if that ‘fund raising’ comes from ‘donations’ then the government again gives one dollar for every two actually donated. So the bigger the donation and the higher level of actual payment – the more the government gives.
None of which is recorded in the education budget coz it is an off the books tax expenditure. So the schools with richer parents get more government help. Very progressive.
Probs not actually intended. More likely to just be an interface of separate policies and never actually thought through. Shame.
Now for those of you who are properly interested in the can of worms that is tax and charity stuff I’d recommend my friend CharitywatchNZ‘s blog. Not currently being updated as he has gone back inside (the bureaucracy) for a while. But still all good stuff.