Category Archives: Treasurers Manual

Treasurers Manual. This is broken down into sections, one section relates to one section of the Treasurers Manual – This is being developed!!!!!!!

Goods and Services Monthly Returns

This is a reminder that Conference decided in 1986 that the Methodist Church of New Zealand be registered as one “person” (group registered) for the purposes of the Goods and Services Tax Act 1985.  One of the consequences of this decision is that ALL entities that are under the authority of Conference need to lodge monthly GST returns through the Methodist Church online GST system so that the Church is able to comply with the Act.

The Information Leaflet that relates to GST can be found on the Methodist Church website.  Click HERE to download it.

Monthly GST Returns need to be loaded into the online GST system by midnight on the 25th of each month.  For more information, please contact Peter van Hout in the Connexional Office of the Board of Administration.

Tax Donation Receipts-31 March 2018

Over the last couple of years staff within the Connexional Office have had to deal with concerns expressed by congregational members that the Inland Revenue Department has rejected donations paid to the Church by them.  While it has not been a major concern within the wider Church we have reflected upon the advice we have sent out to the wider Connexion and have updated our information with the help of the Inland Revenue.

Attached to this email are three documents, which are the same, other than the language within them.  One is in English, one is in English with Tongan translation and the other is English with a Samoan translation.

The documents listed below are the latest information we have available and if followed should allow for the smooth processing of tax donation receipts for the tax year ending 31 March 2018.

If a congregational member has an issue, we would appreciate a note regarding it with the details and the Connexional Office will follow it up with the IRD.  However, final resolution of the  matter is between the IRD and the congregational member, but we will attempt to ensure the system works for all parties concerned.

If we can be of further assistance, please let Peter van Hout in the Connexional Office  know.

Donation Tax Credits under the Income Tax Act 2007 Short Form Samoan

Donation Tax Credits under the Income Tax Act 2007 Short Form Tongan

Donation Tax Credits under the Income Tax Act 2007 Short Form (English only)

Accounting Treatment – Housing Allowance – Presbyter Living in a Parsonage

I have received a small number of queries about the accounting treatment of the housing allowance when a presbyter is living in a parsonage.

Most people will know that as part of the remuneration of a presbyter who is living in a parsonage, a housing allowance is added to the gross earnings of a presbyter and then deducted again after tax.  The same value is given as an allowance and subtracted off as a deduction.

As set out in Information Leaflet No. 25 this is done purely for tax purposes to ensure that presbyters and the Church meet their tax obligations under the Income Tax Act.  NO CASH CHANGES HANDS.

Some parishes do an entry in their accounts that debits a housing expense code and credits income received from a parsonage.  The net effect is nil on the bottom line of the Statement of Financial Performance (Profit and Loss Account) is zero.  The entry has no practical accounting affect but in some cases may disadvantage a parish from a compliance point of view.

Why do I say this?

The current Audit Policy of the Church provides for a review to be undertaken when operating revenue as reported in the annual financial accounts is $125,000 or over.  If the above entry is done in the accounts for presbyters housing it takes the operating revenue shown in the accounts closer to the $125,000 than is necessary.  In some cases it may tip them into requiring a review when they may not need one.

In relation to the new accounting standards which come into effect next year, if the entry is done, it takes the total operating expenditure closer to the Tier 3 cut off, which also happens to be $125,000.

From an accounting perspective, it is over stating your income and it is also over stating your expenses.

The notional value of a parsonage, as calculated in the Information leaflet is NOT a proxy for a market value of the rental of the parsonage so it cannot be used for calculating income lost due the parsonage not being able to be rented out on the open market.

My recommendation is that no entry is undertaken in the accounting system to record a housing allowance as income, then show a housing expense of the same value where a presbyter is living in a parsonage as provide under “Calculations for a Minister Living in a Parsonage” in Information leaflet No. 25.

Annual Accounts – Audit or Review

We are getting a few people asking if a parish needs an audit or review for the annual accounts to 30 June 2014.  As posted in June, the Audit Policy of the Church has not changed from last year and I have attached the current policy to this post.

If the parish has total operating revenue of LESS than $125,000 for the 12 months ending 30 June 2014 then the Church does not require the parish to have an audit or review but you could have decide to have one, if you choose to have one.

If the parish has total revenue of the parish is between $125,001 and $2,500,000 then you need to have a review as set out in the Audit Policy.

If the parish has total revenue greater than $2,500,000 then you need to have an audit.

Audit Policy Final 15 May 2013