Hi Steph & Hamish,
I applaud your friend and her workmate for what they are trying to achieve in raising the 12K, I would like to think all of it was going to the medical centre but I guess it is more likely funding themselves for travel and living expenses in the process of providing voluntary expertise in their field, they need to be aware there may be other catches to selling these books in Australia or New Zealand. The main one being GST. If the person selling is not an acceptable charity or organisation under Aus Tax laws then I believe they are liable to pay GST or certainly Income Tax on commisions earned from the sale of the books this being 20% of the books sale price. Personally, I would have sought advice from the Tax Office before starting. It would be a pity to raise 12K and then have to pay the Taxman 3K
In regard to GST the following is from Aus Tax Rules, New Zealand may have similar rules.
Agency sales
You are making an agency sale when you sell consigned goods on behalf of the owner of the goods as their agent. Under these circumstances, you are not liable to pay GST to us on the sale; however, you must pay GST to us on the commission you receive.
The owner of the goods is liable to pay GST on the sale if both of the following apply:
- they are registered for GST
- they make the sale in the course of running their business.
If the owner is not registered for GST or is not selling the goods in the course of running a business and you are registered for GST, you must still pay GST to us on the commission you receive but the owner does not have to pay GST to us on the sale.
It is likely you are making sales as an agent if any of the following apply:
- You do not set the sale price of the goods.
- You receive either a flat rate or percentage commission on completion of the sale.
- You do not hold the goods out in your own right.
- You and the owner of the goods agree that you will act as an agent.
Having possibly bored you so far. I am aware your friends are trying all types of fundraising, but for example if one was to endevour raising 12K from the sale of these books they would need to sell 1200 books with a 20% return of $11.00 per book bearing in mind 10% would be payable as GST or whatever percentage would be required to be payed in tax under taxable income rates, possibly 3K as allready mentioned. Also they would be liable for postage of the books to purchasers and any other hidden costs. The purchaser has to register their book before being able to use it. If they achieve this figure they would in turn raise a handsome profit of $52,800.00 for the suppliers of the Entertainment Book, less their production and distribution to agent costs.
I spent almost an hour early this morning looking at the website for the Entertainment Book. For me, it would have very limited use as it would cost me more money than what I would save in travel costs alone. I'm semi self suffiecient, I bake my own bread and I don't eat "junk food" and quality food outlets are very limited where I live. Many people in the closest major town, which is 20klm away, would not eat at two of the ones that are listed for the same reason I don't and that is because the food quality is questionable. A lot of the other offers are somewhat superficial, I don't need a mousemat or a mug with a photo on it from Stallards or a $100.00 Gift Voucher from Coles. Another catch to look out for, be aware the books are time limited.
Having said all that and pulled it to pieces....... for a couple or a family of four traveling our Island State or any other for that matter, savings, on fast food and admissions to touristy activities, would far outweigh the purchase price and would be returned many times over if used to the full and you should have already budgeted for traveling costs anyway. Once again I wish your friends every success in their endevour and applaud you for trying to help them achieve it.
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Cascade, I definitely am not going to be "Do No Evil"
