If your business makes payments to contractors or sub-contractors you may need to lodge a Taxable Payments Annual Report (TPAR) by 28 August each year.
The taxable payments reporting system aims to create a level playing field – to prevent dishonest operators from gaining an unfair advantage over the majority. The information collected in the TPAR allows the ATO to identify contractors who are not meeting their tax obligations.
You need to know about TPAR if your business provides any of the following services, even if it’s just part of the services you provide each year:
- building and construction
- courier services
- road freight
- IT and security
- investigation or surveillance.
Doing your TPAR involves three steps:
- Prepare – work out if you need to report. Due to COVID-19, you may have contracted out more services in the past year, for example cleaning or delivery, so you may need to lodge a TPAR for the first time.
- Record – check you’re keeping the right records, such as total payments you make to each contractor for services. This includes cash payments.
- Report – lodge your TPAR online by 28 August. Lodging on time allows the ATO to prefill the information in sole traders’ tax returns. It also enables data-matching.
If your accounting system has been properly set up, you will be able to run a TPAR contractors report.
If you need any help with this or if you have any questions, then please give a call to our tax agents in Gold Coast.