If you have a business in the building, construction or cleaning industries, then you may have heard your accountant talk about Taxable Payments Annual Report (TPAR). This report is a mandatory requirement requested by the Australian Taxation Office (ATO) that you will need to submit by 28 August each year to avoid penalties and so that you can continue to make it count in your business.
Recent changes now mean that the ATO is casting a much larger net with this report and is now requesting that additional industries, such as courier, IT and security industries now also report. Furthermore, certain government entities across all levels will also need to lodge a TPAR by the due date to avoid penalties.
What Is TPAR & Does It Apply To Me?
TPAR is an ATO report designed to provide greater clarity around contractors and subcontractors. Originally, this report was only required to be completed by those in the building and construction industries.
Recent changes now mean that the below industries must also submit this report if they have an Australian Business Number (ABN) and make payments to contractors to assist with services on their behalf. Industries that require a TPAR to be completed now include:
- Building and construction services
- Cleaning services
- Courier services
- Road freight services
- IT services
- Security, investigating and surveillance services
Government entities at the federal, state, territory and local levels may also need to complete a TPAR each year on payments made to entities for providing services. This includes grants for people or organisations that have an ABN (excluding local government entities).
Your TPAR will not require you to report on payments made to employees.
What Information Do You Need To Keep?
Thankfully, most of the information required to complete your TPAR report can be found on contractor invoices. The details that you will need to include for each payee are their:
- Total amounts for the financial year for the gross amount paid, total GST paid and, if no ABN is recorded, the total tax withheld.
Keep in mind that you will only need to keep this information for payments that have been made on or before 30 June each year, and payments that are for services (eg. Exclude payment for materials only or incidental labour).
If you are currently using Xero or another Accounting Software product most providers have an in-built tracking for this report. You may just need to turn the option on or ensure you are entering the correct data into your accounting file to make sure this tracks correctly.
If you need assistance with doing so, contact our team and we can review what is required and any next steps.