To date, the Federal, State and Territory governments have introduced a range of economic measures in response to the Coronavirus (COVID-19). Some of these have been discussed in accompanying articles, COVID-19 relief measures for NFPs and A summary of the Payroll Tax COVID-19 measures.
The Australian Charities and Not-for profits Commission (ACNC) also recognises the impact that this crisis has on charities and charity operations. To that end, the ACNC has announced a blanket extension for the submission of the 2019 Annual Information Statement (AIS). All charities with AIS due dates between 12 March 2020 and 30 August 2020 now have an extension until 31 August 2020 to submit their AIS. This extension also includes bushfire affected charities that had previously been granted an AIS submission extension to May 2020.
Eligible charities will have their AIS due dates updated on the ACNC Charity Register.
With social distancing rules being likely to be extended, charities may encounter difficulties in holding their regular board meetings or even their scheduled annual general meeting (AGM). Charites and their Responsible persons will need to decide if it is feasible to continue to hold their regular board meetings and AGM remotely through the use of technology until the restrictions are lifted.
Charities and their Responsible persons should also consider the procedural requirements of the charity governing documents covering regular meetings or AGM to ensure that the it adheres to the law. It is also important to check with the relevant State or Territory regulator (for incorporated associations) or Australian Securities & Investment Commission (ASIC) (for companies) whether it is feasible to delay the AGM.
Some regulators, such as the ACT Government has applied a 3 month-extension to ACT incorporated associations who are due to hold an AGM; others such as the ASIC has indicated that it will not take any action for certain eligible companies if they postponed their AGMs.
Charities and their Responsible persons are encouraged to check the information on their relevant regulator website for further guidance on the requirements (the ACNC has compiled an extensive list of regulators).
Some charities may need to modify or temporarily halt their usual operations or activities because of COVID-19. If your charity operations do change, it is important that the modified operations are consistent with your charity’s charitable purposes so that it is to be able to maintain on going entitlement to registration with the ACNC and where applicable tax concessions and deductible gift recipient status.
Charities must remain solvent and should consider the financial impact of COVID-19. A charity may need to draw on its reserves to response to the unexpected changes in its financial positions. It is important to consider any restrictions on the use of reserves and ensure proper records be kept on the decisions and discussion to draw on a reserve.
The ACNC has provided a list of other organisations and websites that have additional information specifically related to COVID-19 that may be of assistance.
This article provides a general summary of the subject covered and cannot be relied upon in relation to any specific instance. It is not intended to be, nor should it be relied upon as, a substitute for professional advice. TaxEd Pty Ltd and any person connected with its production disclaim any liability in connection with any use.
This article provides a general summary of the subject covered as at the date it is published. It cannot be relied upon in relation to any specific instance. TaxEd Pty Ltd and any person connected with its production disclaim any liability in connection with any use. It is not intended to be, nor should it be relied upon as, a substitute for professional advice.