Tax improvements from 1 April for volunteer payments

Fire and Emergency have committed to make volunteering easier by reducing administration, inconvenience, or cost to our volunteers. From today, there will be improvements to the tax requirements for payments made to volunteers – this means that volunteers will not be liable for an ACC payment against any payment made by us.

Fire and Emergency worked with Inland Revenue to change this tax legislation and how it applies specifically to payments made to our volunteers.

Improving the tax process for payments made to volunteers

In the past, payments received by a volunteer for their volunteering activities with Fire and Emergency was taxable income unless it was a reimbursement of actual expenditure incurred. These taxable amounts were treated as ‘honorarium’ under the Income Tax Act 2007 and were taxed as a ‘schedular payment’. This meant that Fire and Emergency was required to withhold tax on the amount paid, which resulted in additional compliance obligations for volunteers.

  • The withholding tax was not a final tax and so volunteers had to file an income tax return even if it was for a small amount of income.
  • This would often lead to either under- or over-payment of tax, meaning that some of our volunteers would also then be required to pay an additional ACC levy.

Changes from today

From today, honorarium payments received by volunteers of Fire and Emergency are subject to PAYE instead of being taxed as a schedular payment. This means that PAYE and ACC levies are deducted by us at the time the payment is made and volunteers will no longer receive an additional ACC invoice at the end of the year, or need to file an income tax return for these payments.

If you’re claiming for a payment as a volunteer, you will still need to fill out a form for Inland Revenue, though it is now the IR330 form. You’ll find more information about this on the Portal.

Making things easier for Volunteers

As an organisation, we rely on our volunteers to ensure that we can carry out our principle objective to protect and preserve life. We understand that the time of our people is limited and precious, and so it’s our goal to keep working towards making it easier, low cost and convenient to attend training and we will continue to find and remove potential barriers for people who choose to volunteer with us.

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