11 Mar 2020

Parents seek tax rebates on past camp fees

10:20 am on 11 March 2020

The government's school donation scheme could open a floodgate of requests for tax rebates on cost payments for things like school camps going back four years.

High school students

Photo: RNZ / Richard Tindiller

The scheme has made it clear that payments many people thought were compulsory were in fact optional and eligible for a 33 percent rebate.

Tauranga's Oropi School board of trustees chairperson Mark Weston told RNZ he realised last year he could claim donation tax credits for previous years' school costs.

"Once the whole donations bill came out last year, I had the thought once they mentioned that camps were donations that potentially I could claim four years back and the community could as well, which would be good for money in pockets of people who have had to scrimp and save to send their children on camps," he said.

Weston said he would need to ask the school for receipts showing he made donations for the six camps his two children went on in the past four years, but it was not clear if schools could do that.

"The bottom line on the financial statements won't change at all, it's just whether or not they're actually allowed to issue a receipt," he said.

Principals' Federation president Perry Rush said the situation could be an administrative headache for schools, but he expected families should be able to get rebates for past payments.

"Schools have never been in a position of being able to charge a fee for camps if the camp is deemed to be curriculum so I think parents would probably have a legitimate claim if they were to ask their school to provide a receipt in order to claim it back for tax purposes," he said.

Rush said most schools knew that camps were an optional cost and he expected they would have made that clear to parents.

Inland Revenue told RNZ a refund would be possible.

"If schools now say parents didn't have to pay, and children could have gone to camp whether they'd paid or not, parents can ask the school for a refund. The parents could then donate that amount to the school, and a DTC [donation tax credit] would be available," IRD said in a statement.

Oropi School principal Andrew King said he hoped the school would not have to go through that process.

"That's quite complicated and cumbersome and that would be very time-consuming for a school to do," he said.

King said he hoped the school could simply re-issue receipts for past payments because the school knew at the time that it could not enforce collection of the money and the ministry had made it clear all such payments were donations.

"Our administration office staff will set a date later this month that they will produce these statements that they've requested."

He said about 20 families were asking for receipts for past payments, but if all parents sought rebates the sums involved could be considerable.

"In my own school context you'd be looking at $50,000 to $80,000 worth of payments over one year, so times that by four, $320,000. That's one school, 350 kids," he said.

King said he expected many other schools could find themselves in a similar position.

"In the past we knew it was a payment we couldn't enforce but it's the word 'donation' that's changed the landscape. We thought it was a voluntary payment, but now it's clearly stipulated, a donation," he said.

King agreed schools might not have made it clear the payments were voluntary because they were worried that families would not pay.