On Changing Rules for Not-For-Profits – Doctors Beware!
The Federal Government has recently released the final report of the Not-For-Profit (NFP) Working Group relating to the tax concesssions the NFP sector is currently able to access.
It is pretty dry reading and there is no endorsement by the government of any of the recommendations from the working group. This then provides little in the way of guidance for us as advisors, however, we need to be aware of the specific recommendations that are in the report as released as they have the potential to change the NFP tax environment markedly.
The major items we see as impacting on the sector include:
- removal of the Fringe Benefit Tax concessions;
- removal of uncapped meals and entertainment facility leasing concessions (this will impact public hospitals and medical staff salary packaging);
- removal of “serial capping” where people may work across a number of concessioned employers (eg: medical staff working at two or more hospitals); and
- removal of “mutuality principle” where receipts from members (eg: Clubs) are not assessable for income tax purposes.
There are a number of other recommendations in the report, however these appear to be the most impactful and possibly controversial. For instance, if the serial capping of FBT-concessioned benefits through public hospitals is removed, is this going to make it more “challenging” for hospitals to recruit and retain medical staff or are they going to have to pay more for their services?
As always, it is a matter of “watch this space”. Where the government goes with these recommendations is anyone’s guess, however, the recommendations as they currently stand are a significant change to the current status quo.