1 00:00:00,480 --> 00:00:01,320 Speaker 1: Bryan Bridge. 2 00:00:01,639 --> 00:00:03,800 Speaker 2: Your news Talk to Big Time is seventeen after six. 3 00:00:04,160 --> 00:00:08,920 Speaker 2: Around nine thousand clubs, societies, trade associations and industry councils 4 00:00:08,960 --> 00:00:11,680 Speaker 2: are in line to possibly be slapped with a tax bill. 5 00:00:12,240 --> 00:00:15,680 Speaker 2: Inland Revenue has changed the way it interprets the law 6 00:00:16,160 --> 00:00:18,840 Speaker 2: and they're keen to crack down on businesses they think 7 00:00:18,840 --> 00:00:22,120 Speaker 2: are masquerading as charities in order to reduce their tax bills. 8 00:00:22,360 --> 00:00:25,239 Speaker 2: Jane Tips Trainey is The Herald's Wellington Business editor. She's 9 00:00:25,239 --> 00:00:29,120 Speaker 2: with me tonight. Hey, Jana, Hey, Ryan. What are these 10 00:00:29,200 --> 00:00:33,599 Speaker 2: changes going to look like for these clubs and associations? Potentially, yes, 11 00:00:33,680 --> 00:00:34,280 Speaker 2: So look. 12 00:00:34,159 --> 00:00:36,840 Speaker 1: At the moment, if you're a sports club or any 13 00:00:36,880 --> 00:00:40,840 Speaker 1: sort of member society, there are special exemptions which means 14 00:00:40,880 --> 00:00:42,880 Speaker 1: you don't need to pay tax, for example, on the 15 00:00:43,400 --> 00:00:47,640 Speaker 1: subscriptions that you receive from your members. But Inland Revenue 16 00:00:47,760 --> 00:00:52,880 Speaker 1: has been looking to change this. So it actually it 17 00:00:53,800 --> 00:00:57,480 Speaker 1: releases guidance that say this is how you interpret the law, 18 00:00:57,800 --> 00:01:01,000 Speaker 1: but it's updating that guidance to say, actually a bunch 19 00:01:01,040 --> 00:01:03,560 Speaker 1: of these club societies are going to have to pay tax. 20 00:01:03,920 --> 00:01:08,200 Speaker 1: So Inland Revenue is doing that, you know, on one side, 21 00:01:08,319 --> 00:01:10,480 Speaker 1: but then on the other side, you have the governments 22 00:01:10,560 --> 00:01:12,240 Speaker 1: which has come in and said we want to crack 23 00:01:12,319 --> 00:01:15,480 Speaker 1: down on charities and make sure that, as you said before, 24 00:01:15,840 --> 00:01:19,160 Speaker 1: businesses that are actually masquerading as charities, we want to 25 00:01:19,200 --> 00:01:21,560 Speaker 1: make sure they are paying tax. So you've got two 26 00:01:21,560 --> 00:01:25,160 Speaker 1: separate things ID doing it's thing, government wanting to achieve 27 00:01:25,240 --> 00:01:28,880 Speaker 1: something else. And what is happening now is that the 28 00:01:28,920 --> 00:01:31,000 Speaker 1: IID is saying, actually, we'd still like to change the 29 00:01:31,000 --> 00:01:34,040 Speaker 1: way we treat clubs and societies, but we're going to 30 00:01:34,080 --> 00:01:36,560 Speaker 1: put this work on hold while we wait for the 31 00:01:36,600 --> 00:01:41,720 Speaker 1: government to sort out what it does with charities just 32 00:01:41,840 --> 00:01:46,080 Speaker 1: more broadly. So it's kind of a messy situation. What 33 00:01:46,200 --> 00:01:49,400 Speaker 1: it basically does is create quite a bit of uncertainty 34 00:01:49,440 --> 00:01:53,640 Speaker 1: for these nine thousand club societies, trade associations, professional and 35 00:01:53,680 --> 00:01:57,640 Speaker 1: regulatory bodies, industry councils, and so on, because on the 36 00:01:57,640 --> 00:02:00,160 Speaker 1: one hand you have IOD wanting to tax them, but 37 00:02:00,200 --> 00:02:03,040 Speaker 1: then IRD saying we'll put this work on hold and 38 00:02:03,080 --> 00:02:05,840 Speaker 1: wait for this broader charities thing that the government's doing 39 00:02:06,120 --> 00:02:07,920 Speaker 1: to iron itself out. 40 00:02:08,160 --> 00:02:10,280 Speaker 2: Goodness may it sounds like a bit of a rollercoaster 41 00:02:10,320 --> 00:02:13,480 Speaker 2: for these poor organizations. How much of a burden will 42 00:02:13,520 --> 00:02:16,160 Speaker 2: the you know, an admin burden of potentially doing tax 43 00:02:16,200 --> 00:02:18,639 Speaker 2: be for these organizations. 44 00:02:18,240 --> 00:02:20,440 Speaker 1: Well, I think it'll be quite a bit. I spoke 45 00:02:20,480 --> 00:02:24,840 Speaker 1: to the independent tax specialist Jeff Nightingale earlier today and 46 00:02:24,880 --> 00:02:27,280 Speaker 1: he said, you know, some of these clubs and things, 47 00:02:27,320 --> 00:02:30,240 Speaker 1: they don't really have a lot of profit, so that 48 00:02:30,320 --> 00:02:33,240 Speaker 1: the tax burden might not be that big. The issue 49 00:02:33,280 --> 00:02:37,360 Speaker 1: is going to be the compliance, in Jeff Nightingale's view, 50 00:02:37,680 --> 00:02:41,480 Speaker 1: so he thought that actually, ID probably wouldn't push on 51 00:02:41,520 --> 00:02:45,080 Speaker 1: with this, but you know, we're going to have to 52 00:02:45,080 --> 00:02:47,760 Speaker 1: to wait and see. Now, we'll probably find out at 53 00:02:47,760 --> 00:02:50,680 Speaker 1: some point after the budget, which is on May twenty two. 54 00:02:50,840 --> 00:02:53,720 Speaker 1: That's when the government will release what it's going to 55 00:02:53,760 --> 00:02:58,440 Speaker 1: do with charities, and after that point, the assumption is 56 00:02:58,480 --> 00:03:02,040 Speaker 1: that we'll we'll find out a bit more what's in 57 00:03:02,080 --> 00:03:05,600 Speaker 1: store for these clubs and societies. I mean, nine thousand 58 00:03:05,680 --> 00:03:08,800 Speaker 1: of them is a lot, and I suspect a bunch 59 00:03:08,840 --> 00:03:12,360 Speaker 1: of them probably don't even know that Inland Revenue is 60 00:03:12,400 --> 00:03:17,040 Speaker 1: thinking about changing their tax treatment because actually it's sort 61 00:03:17,080 --> 00:03:21,040 Speaker 1: of buried this little detail in a long consultation document 62 00:03:21,120 --> 00:03:24,640 Speaker 1: it released earlier this week. So bit of uncertainty there, 63 00:03:24,680 --> 00:03:29,040 Speaker 1: but I think Ultimately, the idea that the government has 64 00:03:29,120 --> 00:03:32,200 Speaker 1: to relook at the way all these things attaxes is 65 00:03:32,240 --> 00:03:35,200 Speaker 1: probably a positive thing and should bring us more in 66 00:03:35,320 --> 00:03:36,960 Speaker 1: line with what other countries do. 67 00:03:37,160 --> 00:03:39,440 Speaker 2: Right, And so just to clarify, so this is not 68 00:03:39,800 --> 00:03:42,560 Speaker 2: this particular part that IOD has been looking at, is 69 00:03:42,680 --> 00:03:45,600 Speaker 2: not part of the pushback against Destiny Church. This is 70 00:03:45,640 --> 00:03:47,560 Speaker 2: a separate issue they've been looking at separately. 71 00:03:48,680 --> 00:03:51,320 Speaker 1: Yeah, it is a separate issue. I mean it's related. 72 00:03:51,480 --> 00:03:54,440 Speaker 1: So IOD was doing this work and it's putting this 73 00:03:54,880 --> 00:03:58,760 Speaker 1: work kind of on hold while we figure out what 74 00:03:58,760 --> 00:04:00,920 Speaker 1: we're doing with charities more oddly, because you know, these 75 00:04:00,960 --> 00:04:04,680 Speaker 1: rules are pretty complicated and they interlink. But it is 76 00:04:04,800 --> 00:04:09,920 Speaker 1: just interesting that iod's position is actually that these clubs 77 00:04:09,920 --> 00:04:11,440 Speaker 1: and things need to be taxed. 78 00:04:11,640 --> 00:04:13,960 Speaker 2: Yeah, it is interesting, but I mean give them an inch, 79 00:04:14,000 --> 00:04:17,360 Speaker 2: they'll take a mile. That text everything if they could. 80 00:04:17,720 --> 00:04:19,680 Speaker 2: Thank you so much for that donation of training with 81 00:04:19,760 --> 00:04:22,960 Speaker 2: us the Zeland Herold Wellington Business Editor. For more from 82 00:04:23,040 --> 00:04:26,320 Speaker 2: Heather Duplessy Allen Drive, listen live to news talks. It'd 83 00:04:26,360 --> 00:04:30,440 Speaker 2: be from four pm weekdays, or follow the podcast on iHeartRadio.