Key information:
- The Australian Tax Office (ATO) regards Sheds as charities
- Charities must be registered with the Australian Charities and Not for Profits Commission (ACNC) to be income tax exempt
- To be registered with the ACNC, your Shed must have an ABN
Need help?
If you have any questions, please get in touch on 1300 550 009 or [email protected]
Frequently Asked Questions
Historically some Not-for-profit (NFP) organisations, including Men’s Sheds, have self-assessed as income tax exempt and therefore did not lodge income tax returns.
The ATO now deem Sheds ineligible to self-assess as income tax exempt, unless registered with the ACNC and are endorsed by the ATO.
So that eligible Sheds can continue to be exempt from income tax, we strongly recommend that your Shed registers as a charity with the ACNC, and applies for an income tax exemption as part of this registration (Note: charity registration can be backdated and should be backdated to at least 1 July 2023).
If already registered with the ACNC, ensure you have income tax exemption.
As an independently incorporated legal entity it is your legal responsibility to ensure you are compliant with tax law. We are happy to provide you with advice and support.
More Information
Sheds that are not currently registered with the ACNC may refer to the ACNC website for details on the application process and to complete an application. See here: www.acnc.gov.au/for-charities/start-charity/apply/application-checklist
Once your Shed has successfully registered with the ACNC, you will be required to submit an Annual Information Statement to the ACNC after the completion of each financial year. See more info: www.acnc.gov.au/for-charities/annual-information-statement
Sheds already registered with the ACNC as a charity must ensure they have been endorsed by the ATO as a tax exempt charity:
- This can be done by checking your shed details on the ABR website: https://abr.business.gov.au
- If income tax exemption is required, this can be completed by application on the ATO website: www.ato.gov.au/Forms/Application-for-endorsement-as-a-tax-concession-charity
Sheds Not Registered with the ACNC
These sheds must lodge an annual return or non-lodgement advice with the ATO as follows, depending on the level of their taxable income. Basically, taxable income is defined as assessable income less allowable deductions. Assessable income does not include membership fees or donations received.
Sheds with a taxable income exceeding $416 in one income year are required to lodge an income tax return. We recommend sheds that intend to lodge an Income Tax Return seek professional accounting advice.
Sheds with a taxable income less than $416 in one income year may submit a non-lodgement advice in lieu of a tax return. A non-lodgement advice is submitted as follows (this information was copied directly from correspondence with the ATO);
Sheds can notify the ATO of a non-lodgement advice for an income year by one of three methods. To make the request you need to be listed as an authorised contact on ATO records to act on behalf of the organisation. If you need to update your authorised contacts go to ato.gov.au/NFPnotifyofchanges for more information on how to update ABN registration details.
1) Phone
Call our Lodge and Pay enquiry line. Due to privacy reasons you will need to be an authorised contact already listed on ATO records, to confirm your identity and authorisation to access the account.
2) Written request
Write us a letter that includes the following details:
- Title at the top of the letter: NFP non-lodgement advice
- Organisation’s ABN
- Name of organisation
- Organisation’s postal address
- Income year for the non-lodgement advice to apply to. For example, 2023-24 income year.
- Reason for requesting the non-lodgement advice. For example, My organisation is a NFP Company with less than $416 of taxable income and is not required to lodge an income tax return.
- First and last name of an authorised contact listed on ATO records, to act on behalf of the organisation.
- Phone number for authorised contact
- Signature of authorised contact
- Date of signing
Post your completed NFP non-lodgement advice letter to:
Australian Taxation Office, PO Box 327, ALBURY NSW 2640.
3) Registered tax agent
A registered tax agent can submit the non-lodgement advice on your behalf, using Online services for agents.