If your business operate within the following industries, then you will need to lodge a TPAR (Taxable Payment Annual Report):
• Building & construction services, cleaning services and courier services: reporting commenced from 1 July 2018 therefore your 2019 report will need to be lodged by 28th August 2019.
• Road freight services, information technology services and security, investigation or surveillance services: reporting have only commenced from from 1 July 2019 so your first report will not be due until 28th August 2020.
What is TPAR?
TPAR is a form of reporting that ATO uses to identify contractors who may have not met all of their tax obligations.
The reporting informs the ATO of contractors that provided services to your business. Contractors may include subcontractors and consultants and they can operate as sole traders, companies, partnerships or trusts.
What kind of payments do you need to report?
The payments that you need to report are only those payments made to contractors that provide services for your specialised industry. For example, cleaning businesses will only need to report on payments made to contractors that provide cleaning activities.
If the contractor provides an invoice for materials only, then these payments can be excluded from your report. If the invoice doesn’t state a breakdown between materials & labour, then include the whole payment in your report.
What details should you record?
The details you need to report for each contractor will include their ABN (if known), contractor’s name, address, total gross amount you paid for the financial year, total GST included in the gross amount paid and total tax withheld where their ABN was not quoted.
The timing of payments determines the reporting obligations – you only include invoices according to when they are paid and not according to when the invoice is issued to you. Any invoices unpaid as at 30th June should not be included on your report.
Every time you receive an invoice from a contractor, check that the ABN on the invoices matches to your record of that particular contractor. If they have changed their ABN, then you will need to include each ABN for that contractor in your report.
It is also a good idea to check your contractor’s ABN to see if their details and GST registration are correct. You can do this by using the ABN lookup.
How do you lodge your TPAR?
If your accounting software can produce this report for you, then you can lodge online with the ATO.
If your accounting software cannot produce this report, then you will need to complete and lodge a paper form. The Taxable payments annual report form (NAT 74109) can be ordered from the ATO.
Please note that ATO will not accept photocopied or printed TPAR forms. You will need to complete the original form sent by the ATO.
What if you operate in the specified industry but have nothing to report?
If you are not required to lodge a report then you will still need to advise the ATO to avoid late lodgement penalty and unnecessary follow up.
This can be done by completing a form on the ATO’s website.
There are also some exemptions for businesses to be able to lodge a TPAR nil report. Please refer to the ATO’s website for more information.
Find out whether your business has a requirement to lodge for TPAR or not. If you do, then make sure that it is lodged by the due date as a late lodgement penalty may apply.
Contact CrossCorp for more information or if you need help in preparing your TPAR.