ATO expands TPAR criteria

Wayne StaalHow to save tax, Small Business

The ATO continues to expanded the list of businesses who must report payments they make to contractors for services via the taxable payments annual report (TPAR).

Alongside businesses in the building and construction industry, any business that supplies cleaning or courier services are now also included in the taxable payment reporting system. You must report payments made to contractors each year providing your business has an Australian business number (ABN). The TPAR is due every year by 28 August.

You must report when:

  • You are running a business primarily in the building and construction industry.
  • You are running a business providing cleaning or courier services (even if it is only part of the services you provide). You may need to lodge a TPAR if the payments you receive for courier or cleaning services account for at least 10 per cent of your total GST turnover.

The ATO defines each service as follows:

  • Building and construction services cover a broad category, including architectural work, certification, engineering, and project management and surveying.
  • Cleaning services include cleaning in interior and exterior spaces, carpet cleaning, swimming pool cleaning and gutter cleaning.
  • Courier services include commercial activities where goods are collected or delivered on foot or via vehicles or drone. It will not be considered a courier service if delivery is the only option your customers have to receive their goods, you used a passenger transport service or a freight transport.

When it comes time to report make sure you include the following payee details:

  • The ABN (where known)
  • Business or individual’s name
  • Address
  • For the financial year, the total Gross amount paid, total GST paid to the contractor (included in the gross amount) and any tax withheld where ABN was not given.

There are some payments you will not be required to disclose, including:

  • Payments for incidental labour
  • PAYG withholding payments
  • Payments within consolidated groups
  • Payments for private and domestic services
  • Payments for materials only
  • Unpaid invoices as at 30 June each year

Need help and want more information? Call Holmans for assistance on (07) 5430 7600 or send us an email.