Whenever we consider making changes to the forms, it is important that we consult on them, with you, the sector. It’s been a while since we last proposed any changes, so we’re really interested in your thoughts and feedback. This is an important process for us at Charities Services as it helps us to understand what works and where we can make improvements.

A number of the proposed changes come from the Charities Amendment Act which came in last month and the External Reporting Board’s (XRB) introduction of the new reporting standards in May this year. We’re also suggesting some changes to make things easier for charities and improve the data on the Charities Register.

The consultation period runs until 24 October 2023. We encourage you to share your feedback.

We have developed an online feedback form that walks you through the changes with specific questions. You can also email your feedback and questions to formsfeedback@charities.govt.nz.

More information is available on the form changes hub on our website. The team have created resources to help explain everything and will be running online drop-in sessions at the end of August. You can find out more about those later in this newsletter.

The team are also working to implement the changes from the Charities Amendment Act into our daily mahi. We’re working on guidance to help you understand what the changes mean, particularly for those that come in on 5 October 2023.

Lastly, I wanted to remind you that we are here to help! If you ever have questions, or need some support, please get in touch with the team at info@charities.govt.nz.

Nā Charlotte Stanley
Kaiwhakahaere Matua, General Manager

Changes to the Charities Act

What's happened? 

The Charities Amendment Act 2023 has made changes to the Charities Act 2005. On 5 July 2023 a few changes came into play. Most of those involve us improving the clarity of the information in our website guidance, which we’re currently working on.

Last newsletter we introduced our new Charities Act Hub on our website. We will keep that page updated with more detailed information, so you always have somewhere to check in on our progress.

What's happening? 

Today we launched our forms consultation, seeking your feedback on proposed changes to the forms used to register, file annual returns, and update details. This runs until 24 October 2023. You can find more information on this process later in the newsletter.

We’re also working on issuing model rules for the different types of legal entities that charities can be. When these are done, you’ll be able to find them on our website.

What's coming up?

On 5 October 2023 a second set of changes will come in. A key change is the new requirement for charities to review their rules every three years. We know that charities are interested in what that will mean for them, and what they need to do.

The key point here is not to worry! This change is about empowering officers to have confidence in the rules and processes they have in place to run their charity. To help make this easier, we are currently working on guidance that will explain what good looks like when it comes reviewing governance procedures. We’ve also drafted a question for the annual return form. We’d welcome your feedback on how that’s framed, and what more support you might need.

The External Reporting Board (XRB) Updates

Tier 3 and 4 Standards Updates

In May 2023, the External Reporting Board (XRB) published new reporting standards for Tier 3 and Tier 4 charities. 

Although these new standards are not mandatory until next year (reporting periods beginning on or after 1 April 2024), charities may choose to adopt these new standards earlier. If your reporting period ended on or after 15 June 2023 (so filing with us in December 2023), you can look into early adoption. 

Our forms consultation includes a proposal to combine the Tier 4 performance report and annual return. This is meant to make it easier for smaller charities by only having to report once.

The XRB have started releasing resources and guidance for Tier 4 charities to help you with the new standards:

• A Tier 4 charities hub on their website with up-to-date information on the new standards. 
• The XRB have released guidance to help you understand how to classify your transactions into the categories of cash received and cash paid.
• A webinar introducing the new Tier 4 reporting standards.
• A short video guide on how to complete the new simplified Tier 4 template.

Tier 1 and 2

For reporting periods beginning on or after 1 January 2022, Tier 1 and 2 charities are required to report service performance information along with the financial statements they file with us.

The XRB have released a new piece of guidance on disclosing how you measure your service performance.

We are working closely with the XRB to try and make reporting as easy as possible. As more guidance and resources become available, we will share them with you here. 

Upcoming Consultation on our Forms

We’re proposing changes to the forms charities use to register, report, and update their details. We really want your feedback on what works, and what could be improved.

Consultation is open from 11 August 2023 until 24 October 2023. We are proposing changes to the Tiers 1-4 Annual Returns (including update details form) and Registration Application Form. 

Why are we changing our forms?

We are proposing updates to our forms to include changes to the Charities Act 2005 and the new reporting standards published by The External Reporting Board. 

We are also suggesting other changes to improve the quality of information on the Charities Register, make it easier for charities to report and speed up the registration process. 

Providing your feedback

Visit the Consultation on form changes page on our website for up to date information, reference documents and other guidance on the form changes.

Before you provide feedback, we suggest reading the reference documents for explanations on the proposed changes in the forms. You can give feedback on as many or as few of the forms as you like.

The easiest way to provide feedback is by completing the online feedback form.  Alternatively, you can email your feedback, or any questions you have, to formsfeedback@charities.govt.nz.

We’re aiming to have the new forms ready by the middle of next year. Your feedback is essential to making sure these are fit for purpose. 

He Rourou Atawhai – Charities Services Forms Consultation

We are hosting a bunch of zooms at the end of August where you can provide verbal feedback or ask our staff questions about the forms consultation.

We will have a short presentation discussing the changes and then open up for a Q&A session and to hear your feedback.

These sessions will not be recorded but we will take notes on your feedback. To sign up to one of these sessions see the times and dates below. For any questions, please contact formsfeedback@charities.govt.nz

• Tuesday 22 August – 12pm – 12.45pm
• Thursday 24 August – 7pm – 7.45pm
• Tuesday 29 August – 7pm – 7.45pm
• Thursday 31 August – 12 pm – 12.45pm

Incorporated Societies Update

To remain on the Incorporated Societies Register, your society will need to reregister under the Incorporated Societies Act 2022 (the new Act). You can submit your application for reregistration to the Companies Office from 5 October 2023 until 5 April 2026.  

The new legislation will affect the way societies operate, including those that are also registered charities. You can learn about the key changes on the Companies Office website.

For more information on what reregistration is and what you need to get ready, have a look at what you can do now.

Need help with reporting?

31 March 2023 will have been the end of the financial year for many of you, which means you will already be on the way to submitting your Annual Return for the 30 September 2023 due date.

Check out our Annual Returns page for more information on filing your return.

We have guides and templates for both Tier 3 and Tier 4 charities on our website. Make sure you check out the reporting webinars too if you need some reporting tips.

If you are a small Tier 4 charity, there is a simplified performance report template that you may find easier to use. You can find the Simple Tier 4 Template and guidance on how to use the template on our website.

We also offer one-on-one online clinics if you have any questions you would like to discuss with one of our team members. You can find out more information about clinics on our website here.

QUICK NEWS OF INTEREST 

Better Banking for All 

From Left top Right- Hon Duncan Webb Minister of Commerce and Consumer Affairs, Richardo Menedez March Green MP, Holly Snape, Chairperson CNA and CEO of Community Waikato, Jan Logie Green MP and Ros Rice, EO of Community Networks Aotearoa.

In late June, Community Networks Aotearoa launched their research report 'Better Banking for All - Creating Ease of Banking for the Not-For-Profit Sector'. This research is aimed at bringing about positive change in the banking experiences of not-for-profit organisations. The work involved collaborating with Government and the banking sector to identify solutions for community organisations. It is vital that the community sector can focus on their core missions and maximise their impact on the communities they serve. You can view and download a copy of the report here.

UPDATES FROM WIDER GOVERNMENT

Proposed law change for charity deregistration

Parliament is considering a change to the charity deregistration tax rules.

When a charity is deregistered and does not re-register within one year, an amendment to the rules would require income tax to be paid on certain net assets if they are not transferred to another registered charity.

This is not law yet. The proposal is in a bill expected to be enacted in March 2024. If approved, it may apply to transfers from 18 May 2023.

IR recommend you talk to your tax agent or legal advisor for more information on how this might affect you.

You can also find more technical information about The Taxation (Annual Rates for 2023-24, Multinational Tax, and Remedial Matters) Bill on Inland Revenue’s tax policy website.

RESOURCES

Read the plan version of this email here.