Compliance Requirements for Community Childcare Centres and Not-for-Profit Organisations in Australia

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Compliance Requirements for Community Childcare Centres and Not-for-Profit Organisations in Australia

What is a Community Childcare Centre or Not-for-Profit Organisation?
A community childcare centre typically provides early learning services that are community-managed and not-for-profit. Similarly, an NFP organisation exists to serve educational, charitable, or community purposes without distributing profits to members.

Legal structures may include:

• Incorporated associations
• Companies limited by guarantee
• Charities registered with the ACNC
• Co-operatives or public trusts

Each structure affects tax, reporting, and audit obligations.

Do You Need to Register with the ACNC?
The Australian Charities and Not-for-profits Commission (ACNC) is the federal regulator for charities. Organisations with a charitable purpose—such as education or relief of disadvantage—can and should register.

Benefits include:

• Income tax exemption
• GST and FBT concessions
• Grant eligibility
• Public credibility

You must meet governance standards and operate for a genuine charitable purpose to qualify.

Are You Exempt from Income Tax?
Not all NFPs are automatically tax-exempt.

• Charities: Automatically exempt once registered with the ACNC and endorsed by the ATO
• Other NFPs: Must self-assess against ATO criteria

To self-assess, your organisation must:

• Operate solely for NFP purposes
• Have a valid NFP clause and winding-up clause
• Meet a relevant exemption category (e.g. community service, culture, education)

If not exempt, you must lodge income tax returns.

Understanding GST and BAS Requirements
NFPs and childcare centres must register for GST if annual turnover exceeds $150,000. Voluntary registration is allowed under that threshold.

Once registered, you must:

• Lodge BAS (monthly, quarterly, or annually)
• Charge GST on taxable supplies
• Claim GST credits on business purchases

Late or incorrect lodgement can lead to ATO penalties.

Lodging Annual Tax Returns: Form 105
If your NFP is not registered as a charity and is not exempt, you must lodge Form 105 – Return for Not-for-Profit Organisations.

Form 105 includes:

• Income and expenses
• Assets and liabilities
• Member and governance details

Failure to lodge may result in fines or loss of concessions.

NSW Incorporated Association Tier System
In NSW, incorporated associations fall under Tier 1 or Tier 2 based on size:

• Tier 1: Revenue over $250,000 or assets over $500,000 – must submit audited financials
• Tier 2: Below both thresholds – may submit simpler reports without audit

Understanding your tier ensures you comply with NSW Fair Trading rules.

Audit Requirements and Thresholds
Audits may still be required even if you're Tier 2, including when:

• Required by grant conditions
• Mandated by the ACNC
• Outlined in your constitution

Trinity Accounting can coordinate with auditors to ensure compliance.

Record-Keeping and Financial Statements
You must retain:

• Bank statements and reconciliations
• Invoices and receipts
• Minutes of meetings
• Details of grant funding

Keep records for a minimum of five years. Trinity recommends using cloud systems like Xero for efficiency and accuracy.

Constitution and Governance Rules
Your constitution must:

• Clearly state the NFP purpose
• Include a valid winding-up clause
• Outline governance, membership, and meeting rules

Missing or outdated clauses can jeopardise funding, ACNC registration, or tax benefits. Trinity can help review and update your constitution.

Grants, Funding, and Compliance Risks
Common funding sources include:

• NSW Department of Education
• Local council grants
• Federal programs
• Philanthropic foundations

Each source may impose different reporting or audit requirements. We prepare funding acquittals and financial reports to ensure ongoing eligibility.

ACNC Obligations: Annual Information Statement
Registered charities must lodge an Annual Information Statement (AIS). Depending on size, you may also need:

• Reviewed or audited financials
• Updates to responsible persons or addresses
• Notification of constitution changes

Late AIS lodgement may result in penalties or revoked registration.

When to Engage an Accountant
Professional advice helps you:

• Comply with ATO, ACNC, and NSW Fair Trading rules
• Prepare accurate financial reports
• Meet audit and grant requirements
• Maximise tax concessions
• Maintain strong governance practices

Trinity Accounting supports dozens of NFPs and community childcare centres with everything from compliance to reporting.

How Trinity Accounting Practice Can Help
We assist NFPs and childcare organisations with:

• GST and BAS lodgement
• Bookkeeping and Xero setup
• Form 105 preparation
• ACNC and ATO compliance
• Tier classification and audit readiness
• Constitution review
• Grant reporting and financial statements

Our team works after hours and weekends to support your schedule.

Conclusion
Running a community childcare centre or not-for-profit is meaningful—but comes with complex compliance obligations. Trinity Accounting helps you stay legally compliant, financially secure, and grant-ready so you can focus on your community.

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