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August 2016

Read a text only version of Charities Update.

Lesa's Message

Lesa Kalapu with Jo Gould and Jane Pierard

Tena koutou, talofa lava and warm greetings,

It is the start of our new financial year here at Charities Services. My Senior Leadership Team and I have been thinking about our priorities for the year ahead, and how we can continue to promote public trust and confidence in the charitable sector.  Supporting you with the new reporting standards is still a major priority for us.
The standards are particularly top of mind for us as we enter peak season for annual returns to be filed. If you are about to file your charity’s annual return don’t forget to check out the resources at www.charities.govt.nz. We have a number of great tools and information to help you!


Lesa Kalapu
​General Manager, Charities Services

Annual Return vs Performance Report For Tier 3 and Tier 4 Charities

A question we often get asked is "why do charities have to complete an annual return and a Performance Report? Isn't this doubling up?". It can feel like a duplication of effort, but there are reasons why both must be completed.

Your charity’s Performance Report is a detailed document about your organisation that contains non-financial information about your activities during the year. It also shows financial information, including notes and policies, and anything else your charity considers useful for the reader.

The annual return form on the other hand, only includes a snippet of the information contained in your Performance Report. It captures the information that is relevant at a high level, and that is useful for gathering information about the sector and informing policy.

The process of filling out an annual return form and attaching financial information is not new in terms of reporting to Charities Services. There has always been a requirement to do both. However, you now attach your Performance Report instead of your financial statements. For financial years ending 31 March 2016 and onwards, we have also updated the annual return form so that the financial information fields in the form mirror the minimum reporting categories found in the Tier 3 and Tier 4 standards. This makes it simpler as there is no need to translate your financial information into two different formats.

The preparation of a Performance Report is not an additional document you have to produce. A Performance Report is instead of any previous form of financial reporting that you used to prepare. Therefore, we only expect you to upload a completed Performance Report, and there is no need to file any other form of financial statements. We would hope that for your organisation, a Performance Report is the only end of year reporting you now have to do.

If your organisation chooses or is required to have a review or audit, that review or audit should be of the Performance Report prepared in accordance with the new reporting standards, not of your old format of preparing accounts.

While you may be familiar and comfortable with how you used to prepare your financial statements, the reporting standards are now the legal requirement for registered charities. The standards form best practice for the not-for-profit sector, and are the correct way of preparing your financial information under the Charities Act 2005.

There is a wealth of information on our website to guide you through preparing your Performance Report and completing the annual return. You can also contact us if you have any specific reporting questions relating to your charity.

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In our previous issue, we introduced our new blog that covers current topics of interest to charities. You can now sign up to receive a notification when a new blog post is published.

Please contact us if you have any questions or topics you would like us to cover in a blog post.

Links to our recent blog posts:

Annual Meeting

Preparations for Charities Services Annual Meeting has begun and we have locked in a date and venue!

The meeting will be held at the Rydges Latimer Hotel in Christchurch on the 14th of November at 9.30am. An invitation and registration information will be sent out to all charities closer to the time. 

Deregistration tax

Recent changes to tax legislation means that a deregistered charity may need to pay a one-off tax on the net assets that are held as at the date of deregistration. The purpose of this tax, which is administered by Inland Revenue, is to encourage charities to distribute their assets to charitable purposes before or soon after deregistering from the charities register.

A deregistered charity has twelve months to distribute its assets to another registered charity or give assets to charitable purposes in accordance with its rules. Assets which have not been distributed within twelve months of deregistration will be taxed. Deregistered charities are also subject to income tax, and will need to file income tax returns, unless another income tax exemption applies.

Alternatively, if the charity re-applies and is again registered as a charity within twelve months of deregistration, the charity will not be taxed on its assets.

Further information, including the dates that any tax is applicable, is available from Inland Revenue’s website (search for “deregistration of charities”).

Charities Services is currently testing a new deregistration application form that captures information about the reasons for deregistration, the value of the charity’s assets and liabilities at the time of deregistration, and what the charity has done (or intends to do) with any accumulated assets and income. A summary of this information will appear on the charities register, and will be available to Inland Revenue. We expect the form will be available for use in the next month.

Webinar Recording

Charities Services and the External Reporting Board (XRB) recently held a webinar (an online seminar) on the new financial reporting requirements for small charities.

Although originally aimed at accountants or those with an accounting background, this resource is also useful for treasurers or anyone in an organisation wanting more in-depth information on specific areas of the Performance Report for Tier 3 and Tier 4 charities.

You can find a recording of the webinar by clicking here.

CAANZ Webinar

Chartered Accountants Australia New Zealand (CAANZ) is running a webinar (an online seminar) titled  "New Reporting Standards for Not-For-Profit" on 30 August. For more details on this webinar, please click here (you may need to search for "New Reporting Standards").

Please note that this webinar is not facilitated by Charities Services, but may be of interest to charities who wish to learn more about the new reporting standards. If you have any questions about this webinar, please contact CAANZ directly.