Non-charitable not for profit (NFP) organisations can still lodge their annual self-review return without receiving a penalty as the ATO applies temporary leniency due to the new annual reporting obligations.
Who needs to lodge a self-review return?
Sporting clubs, community groups and other non-charitable not-for-profit organisations are being reminded to complete their annual self-review return to the ATO, with a temporary pause on penalties offering a short-term reprieve.
Under recent changes, non-charitable not-for-profits that self-assess as income tax exempt must now lodge a self-review return each year. This applies to organisations with an active ABN that are not registered as charities with the Australian Charities and Not-for-profits Commission (ACNC).
ATO confirms temporary leniency
While the requirement itself is not new, the ATO is now enforcing annual reporting obligations. To assist organisations in adapting to this change, the ATO has confirmed it will not apply penalties for late lodgement of the 2023–24 return. This means there is still time to lodge, even if you have missed the original deadline.
What happens after July 2025?
The window for leniency is closing. From July 2025, the ATO will begin applying stronger compliance measures for organisations that fail to meet their obligations. This includes those that have not submitted a return, or that incorrectly claim income tax exemption without meeting the relevant criteria.
Does your organisation need to register as a charity?
Importantly, the self-review process may also reveal that an organisation should be registered as a charity with the ACNC. Determining whether an organisation meets the definition of a charity can be complex and often requires legal guidance.
Next steps for NFPs
If you are unsure where to start with the self-review process, or whether your organisation should be registered as a charity, now is the time to seek advice. Taking early action can help you avoid compliance issues down the track.
Cowell Clarke’s Charity and Not-for-profit team works with a wide range of community and member-based organisations. We can assist with reviewing your eligibility, completing the self-review return, and advising on potential charity registration.
For tailored advice, contact Megan Jongebloed, Anna Young or Daisy McLeod.
This publication has been prepared for general guidance on matters of interest only and does not constitute professional legal advice. You should not act upon the information contained in this publication without obtaining specific professional legal advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication and to the extent permitted by law, Cowell Clarke does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting or refraining to act in relation on the information contained in this publication or for any decision based on it.