In the last issue of CORRvolunteer, we invited your views on the current petrol voucher system and set out some of the inherent difficulties with the existing approach.

Many thanks for all of your responses. These will serve as valuable input in developing future policy.

Your replies underlined the confusion that exists currently about the tax treatment of volunteers’ reimbursement payments. This confusion is not confined to Corrections’ volunteers as the article below, reproduced from Volunteering New Zealand’s May 2007 issue of ‘VNZ Update’ illustrates;

Plans to review the tax treatment of volunteers’ reimbursement payments welcomed

The Government’s announcement that it will undertake work to clarify and streamline the tax treatment of volunteers’ reimbursement payments and honoraria has been welcomed by Volunteering New Zealand.

Many of the more than one million plus volunteers in New Zealand pay for a range of expenses out of their own funds. Some receive reimbursement payments or honoraria from their host organisations as recompense for this, but there is considerable confusion and uncertainty about such payments in terms of taxation.

Volunteering NZ understands that by the letter of the law, even reimbursement of documented expenses should be declared in an annual tax return to the Inland Revenue, even if not then taxed. Other payments such as honoraria and petrol payments without supporting documentation may be liable for tax.

These are areas which the Government has stated it will be working on. That is positive news, as is the National Party statement that volunteers’ reimbursement expenses should not be taxed. Reimbursement payments to volunteers should be treated in the same manner as those received by paid workers and this should include payments such as reasonable honoraria.

(Reproduced by kind permission of Volunteering NZ)

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