Taxable Payments Annual Report
Are you part of an industry that needs to report information of its taxable payments to Contractors to the ATO?
Then surely you know all about the ATO Taxable Payments Annual Report (“TPAR”) which is due by 28th of August each year? You have no idea how many times the answer to that question has been no! So let us provide some more information…
TPAR is an ATO reporting requirement for businesses supplying –
· Building and construction services
· Cleaning services
· Courier services
· Road freight services
· IT services
· Security, investigation or surveillance services
· Mixed services (i.e. a business that provides one or more f the services listed above).
Contractors can include subcontractors, consultants and independent contractors. They can operate as sole traders (individuals), companies, partnerships or trusts.
Assistant Commissioner for Small Business at the Australian Taxation Office advises that “The ATO uses information reported on taxable payments annual reports to make sure that businesses are complying with their tax obligations, for example, being registered for GST if required, lodging BAS and income tax returns, using valid ABNs, or reporting the correct amount of income and paying the right amount of tax. This helps keep all businesses honest and creates a level playing field.”
So each year the relevant businesses, who have made payments to Contractors, need to prepare the required report for the ATO stating the Contractor’s –
ABN
Phone number
Address
Gross payments
GST Paid (if any)
A BAS Agent can help you prepare this report however, records will be required to prepare the report. Most of these records should be kept in your accounting software and will make formulating the report painless. See links below for the major software companies and how they deal with preparation of TPAR –
Xero - https://central.xero.com/s/article/The-Taxable-Payments-Annual-Report
MYOB AccountRight - Reporting taxable payments (Australia only) - MYOB AccountRight - MYOB Help Centre
MYOB Essentials - Producing the Taxable payments annual report - MYOB Essentials Accounting - MYOB Help Centre
Intuit Quickbooks Online - How do I turn on the Taxable Payments Annual Repor... (intuit.com) & How to run a Taxable Payment Annual Report (TPAR) (intuit.com)
BUT… you need to reconcile the details you are providing to the ATO and make sure they match they match the figures/reports in your accounting software before submitting. So unfortunately, it is not just a click of a button (as some software companies would like you to believe).
The ATO has a worksheet that can be used if you are not keeping track of these details through your Accounting Software – this can be found here… BUS00313486js23659.pdf (ato.gov.au)
What happens with this information that you report to the ATO?
The ATO uses this information you have reported to data match to each Contractors tax return to ensure that what they have reported matches what you have reported.
More information regarding TPAR can be found on the ATO’s website… Taxable payments annual report | Australian Taxation Office (ato.gov.au)