Last year, more than 80 percent of businesses in the building and construction industry lodged their Taxable Payments Annual Reports (TPAR) manually, or on paper.
Based on industry talks, a lot of the reports were also filed at the last minute. As the end of financial year looms near, here are three frequently asked questions on taxable payments to get you up to speed.
1. How do I know if I need to prepare a TPAR?
If you have a registered business in the building and construction industry, you need to report to the ATO the total payments you make to each contractor for building and construction services. This reporting regulation affects any business that is primarily in the building and construction industry that are:
a) in the current financial year, more than 50 percent of the purchaser’s business income is derived from providing building and construction services; or
b) in at least one of the two financial years immediately preceding the current financial year, more than 50 percent of the purchaser’s business income was derived from providing building and construction services.
2. What do I need to report?
You need to report payments made to contractors. According to the ATO, this includes a broad range of services for building and construction. There are also a number of payments which you don’t need to report including materials and supplies.
3. When is the deadline?
You need to ensure that you submit your report, for the year ending 30 June, by 21 July. Ensure you include:
- the contractor’s name as shown on the invoice;
- the contractor’s ABN;
- the contractor’s address (if known);
- the total amount paid or credited to the contractor over the income year
- whether any GST has been charged;
- any other information the Commissioner may require.
Want to read more? Download our PDF guide to taxable payments for the end of financial year.
The information provided here is of a general nature for Australia and should not be your only source of information. Please consult an experienced and registered tax agent as each small business’ circumstance will vary for end of financial year.