If you are running a small or medium business, it’s important to be aware of any reporting obligations to ATO (Australian Taxation Office). ATO has started to increase access data and obligations for third party reporting such as TPAR.
A TPAR is a Taxable Payment Annual Report, is an industry-specific report for companies that need to report the total payments they’ve made to subcontracts. Business that makes payments to contractors need to report these payments to the ATO. ATO then uses the data to confirm whether contractors need to organise GST and they are declaring their income and lodging their tax returns correctly. Contractors can include subcontractors, consultants, and independent contractors. They can operate as sole traders, companies, partnerships, and trust.
If you operate a business that has Australian Business Number, then the businesses in the following industries who pay independent contract and subcontractors for relevant services must submit a TPAR report. A TPAR must be lodged by 28 August each year. Industries that are affected by TPAR are:
• Building and construction services
• Road Freight Services or Courier Services
• Cleaning Services
• Information Technology services
• Security, investigation, or surveillance services
When the TPAR report is being prepared, all payments made during the financial year need to be included. Payee details that need to be included are:
• ABN
• Address
• Name of business or individual name
• Total amounts for gross amount paid, and total GST paid.
ATO Assistant Commissioner Tony Goding recently said penalties would follow on late lodgements. Its is getting harder for businesses to hide form the ATO, like using a cash payment to avoid tax, as the TPAR Data gives ATO the extra report to be audited.
To make sure that the report is correctly reported to the ATO it’s a worth while to have proper software for reporting such as Xero software and also having your accountant or bookkeeper access to your financial information so they can prepare and lodge documentation on your behalf.
Feel free to contact Lana and her team at Matovic Business Accountants if you would like to discuss your TPAR obligations or any other business’ accounting and bookkeeping needs.
Email us at info@matovicaccounting.com.au or call (07) 3557 5721.
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