What are the rules about?
Businesses that operate primarily in the building and construction industry have been required to lodge an annual Taxable Payments Annual Report (TPAR) since 1 July 2012 and, in an attempt to disrupt the Black Economy, the Government extended the TPAR regime to businesses which provide cleaning or courier services from 1 July 2018. This is an integrity measure that brings into line the reporting of payments to contractors with the reporting of salary and wages paid to employees in these industries.
TPARs for businesses in the building and construction industry and businesses which supply cleaning or courier services must be lodged with Australian Taxation Office (ATO) by 28 August 2019.
Who is required to report contractor payments?
Businesses primarily in the building and construction industry
If you run a business that operates primarily in the building and construction industry, you are required to lodge a TPAR with the ATO where you have made payments to contractors for building and construction services.
Businesses that provide cleaning or courier services
From 1 July 2018, if you are a business that provides courier or cleaning services then you are required to report payments you make to contractors for these services.
Where you provide a range of services you will need to work out the percentage of the payments you receive each year in relation to cleaning and/or courier services. If the total payments you receive for these services make up 10% or more of your total GST turnover, you must lodge a report.
We have prepared industry-specific ‘Frequently Asked Questions’ documents to assist you in determining whether you are required to report.
Download TPAR FAQ’s for Building and construction service providers here
Download TPAR FAQ’s for Cleaning service providers here
Download TPAR FAQ’s for Courier service providers here
What information should you report?
The ATO requires taxpayers to report payments to contractors for building and construction services, cleaning or courier services (as relevant) made between 1 July 2018 and 30 June 2019. Your report must include the contractor’s ABN (if they have one), name and address, the total amount paid to the contractor for the year and the total GST included in that amount.
Do not include payments subject to PAYG withholding or payments for materials only.
Reports are due to be lodged with the ATO on 28 August 2019 for payments made in the 2019 financial year.
It is worth noting that the information provided in the reports is shared with the individual State Revenue Offices for Payroll Tax purposes.
Compliance can be complex and time consuming. If you have an obligation to lodge a 2019 Taxable Payments Annual Report and require assistance with the completion and lodgement of the report, there are several ways in which we can assist you with your reporting obligation, as follows:
- We can work with you to determine which entities within your group need to report, and what information needs to be reported for the various suppliers you engage; and
- We can also prepare and lodge the annual report efficiently on behalf of the reporting entity using our reporting software package, subject to getting the required information.
Please contact us for further information or to discuss how Pitcher Partners can help you.