New requirements for certain businesses to report to the ATO by 28 August
The Taxable payments annual report (TPAR) is due to the ATO by 28 August 2019. The ATO is encouraging businesses to report online.
The Taxable Payments Reporting System (TPRS) was first introduced in 2012 to strengthen detection of those gaining an unfair advantage by not reporting or under-reporting their income, and to protect the majority of people who are doing the right thing.
The TPRS now applies to businesses providing cleaning or courier services that have an Australian Business Number (ABN) and make any payments to contractors for cleaning or courier services they provide on a business’s behalf. These businesses will need to complete a Taxable payments annual report (TPAR).
This applies even if cleaning or courier services are only part of a business’s activities.
This new report for businesses providing cleaning or courier services applies from 1 July 2018, with the first TPAR due by 28 August 2019.
Businesses must report the total payments they made to each contractor or subcontractor for cleaning or courier services in the 2018-19 financial year.
Businesses providing mixed services, not just cleaning or courier services may need to lodge a TPAR if payments they received for cleaning or courier services make up 10 per cent or more of their total GST turnover.
The ATO uses the information that businesses report to identify people who haven't lodged their tax returns or included all their income.
ATO Deputy Commissioner, Deborah Jenkins, is encouraging businesses providing cleaning or courier services to complete their report online.
“Reporting online is a quick and secure way for businesses to meet their obligations,” Ms Jenkins says.
“It has the advantage of ensuring businesses complete the report correctly, using inbuilt checks, and also provides instant online confirmation once the report is lodged.”
Businesses can report online through the ATO’s Online Services or business software that offers TPAR. For more information on how to lodge, visit www.ato.gov.au/TPAR.
Details that businesses need to report for each contractor are:
- Contractor’s name
- ABN, and
- The total amount the business paid them for the financial year.
“This information is usually on contractors’ invoices, and the same information businesses need when claiming deductions,” Ms Jenkins says.
Businesses can choose to ask a tax professional who can lodge the TPAR online on their behalf, or request a paper form from the ATO.
From 1 July 2019, the TPRS will also apply to businesses providing road freight, IT, security, surveillance and investigation services. These businesses need to lodge their TPAR by 28 August 2020.
Ms Jenkins says keeping good records makes it easier for businesses to complete the report each year.
The ATO’s website has information to support businesses to understand and meet their obligations.
“Our website www.ato.gov.au/TPAR helps businesses to work out if and how they need to lodge, how to record payments and what details to report. Helpful resources include a simple worksheet, sample TPAR, fact sheet, videos, webinars and information in other languages,” Ms Jenkins says.