04. News & Thinking

The impact of the bushfires in Victoria and New South Wales have moved us all beyond words and have prompted much action in relief efforts, both on a financial and non-financial level.

At such a time, it is hard not to be overwhelmed, especially with statistics such as these:

• 27 people have tragically lost their lives as a direct result of the bushfires (including 3 volunteer firefighters);
• it is estimated that in the region of 1 billion animals have perished, either as a direct result of the fire in first instance or as a result of fleeing into predatory areas;
• the estimated damage bill for insurance claims is in excess of $700m; and
• an estimated 192,000 small businesses have been moderately to severely negatively impacted in bushfire regions.

Helpfully, various Federal Government relief initiatives have been offered including:

• immediate cash grants;
• interest free loans;
• funding dedicated toward clean up efforts;
• tax exemptions for wages; and
• stamp duty relief of up to $55,000 for those choosing to restart their lives elsewhere.

There have also been extended deadlines provided to businesses by the ATO in order to meet their compliance obligations.

Unfortunately, alongside this generosity comes those wishing to take advantage of the vulnerability of the people and businesses in this situation in the form of scams.  We are all being urged by the Tax Institute to be extra vigilant at this time to ensure that donations are made to legitimate organisations only. 

If in doubt, a quick search of the Australian Charities and Not-for-Profit Commission Register can confirm the legitimacy of a charity and whether they are entitled to take deductible donations of gifts or money.

Alternatively, the National Bushfire Recovery Agency has a full list of charities with DGR status that have established appeals.

In the event that you uncover a scam, please report it to the ATO’s scam hotline service so others can be aware.

Finally, as tax advisers, it is also important to offer your clients some guidance in ensuring that donations made are deductible and that appropriate records are maintained in support of this.

Please contact us if you have any questions concerning the deductibility of your clients’ donations.  We would also be happy to notify the ATO of any scams that are identified in the course of looking out for your clients.

We’re here to help.

Ann-Maree Ventura  Special Counsel