Rebate scheme benefits charities and business

Hawke's Bay Foundation chairwoman Jules Nowell-Usticke. Photo / File

Hawke's Bay businesses are running out of time to get their share of a $245 million government rebate scheme by helping a chosen charity.

Crowe Horwath partner Greg Neill is encouraging businesses here to give back to the local community before the end of the tax year on March 31, in order to receive a 33.3 per cent rebate.

"Now is the perfect time of year to think about giving to charities as the donation is eligible for a tax rebate in the tax year ending March 31.

"A donation made before that date will mean you can file your rebate claim quickly, and get a tax rebate payment of 33.3 per cent of the donation soon after March 31."

An individual who makes a cash donation to an approved charity can claim a tax rebate of 33.3 per cent of that amount from Inland Revenue.

"Even if you do not wish to receive the funds personally, the rebate itself could be donated meaning you could be giving even more to charities that you are passionate about. The rebate is available for any level of donation, up to the amount of your taxable income for the year."

Hawke's Bay Foundation chairwoman Jules Nowell-Usticke said the situation was a win-win for both the business and the nominated charity.

"Donating at the end of the financial year is not only a financially smart move for a business to get a sizeable rebate but it also positively impacts the workplace culture with the knowledge that employees are a part of a company providing financial support for charities and making a difference in the local community.

"Hawke's Bay Foundation sets out to assist and support a variety of groups and communities that are working towards meeting their own needs and sustainability long term. Our tagline is 'Live Here, Give Here' and we are all about helping local groups and community initiatives prosper.

"Donations are fundamental to our existence, so we are 100 per cent behind educating businesses about the tax advantages of giving before the end of the financial year - and if I can be so cheeky to add, we hope they give generously to Hawke's Bay Foundation.

"Obviously, we're equally encouraging of individuals giving too - they of course benefit from the same tax rebate."

Mr Neill said in terms of the process, it was simply a matter of completing and submitting a form to Inland Revenue with the relevant receipts.

Donating before March 31 means Inland Revenue would be able to begin processing the rebate claim in April following the end of the tax year.

"It's important to remember that the rebate is not available for gifts provided for in your will, so give some serious thought to making the gift during your lifetime. I'd encourage businesses to check with their tax advisor or Inland Revenue for specific advice."

Tax benefits for monetary donations to charities date from 1962. The current tax rules for donations to charities apply from April 1, 2008.

A total of $245.4m of tax credits were claimed back by New Zealand businesses in 2016.

An IRD spokesman said the tax rules for donations to charities came into effect in April 2008 with the aim of promoting charitable giving.

"Broadly governments may seek to promote charitable giving, to further social objectives, as well as for the wider benefits to society which may be over and above the value of the benefit provided through the tax system, and because donations can be effective indicators of when extra goods and services should be provided in market conditions that might otherwise not exist."