Ensuring that you have managed your finances correctly and that you are paying the right amount of tax is important for any business. However, what might also be concerning and often lesser known is that you may also need to lodge a Taxable Payments Annual Report.
Also known as a TPAR, this is a report that you need to lodge by 28th August each year if you meet the following conditions:
- You are a business that makes payments to contractors and you provide services in one of the following industries:
- Building and construction from 1 July 2012
- A courier from 1 July 2018
- Cleaning from 1 July 2018
- Security, investigation or surveillance from 1 July 2019
- Road Freight from 1 July 2019
- Information Technology from 1 July 2019
Why does a TPAR exist?
The purpose of the Australian Taxation Office (ATO) taxable payments reporting system is to prevent competitors in industries from undercutting each other through savings made by paying incorrect and lower amounts of tax. The TPAR’s are cross-referenced with income reported by contractors to find any disparities which will be acted upon. This forces contractors to get their accounts in order to avoid any problems in the event of an audit.
What do I need to include in a TPAR?
The TPAR describes the payments that are made to contractors for providing services. Contractors can include consultants, subcontractors and independent contractors. They can be operating as a company, a partnership, a trust or even a sole trader.
The details needed by the ATO are usually on a contractor’s invoice and should include their:
- Australian Business Number (ABN);
- Name and address, and;
- The gross amount you have paid to them during the financial year, including GST.
This information is then used to identify contractors who have not met their tax obligations.
How do I lodge a TPAR?
A TPAR can be lodged through the ATO’s online business portal if your software allows, or paper forms can be completed and posted to the ATO. It is vital that you double-check all information prior to submitting, such as having the correct ABN on the report.
How can MRG Redshaw help?
- Clarify if your business is required to lodge a TPAR.
- Clarify what payments are required to be reported.
- Review your accounting records and advise on what further information you should be collecting from your contractors.
- Prepare your TPAR or review one completed by you prior to lodgement to ensure accuracy.
Simply contact us today on (07) 3221 4004 if you require assistance from one of our team members.