Taxable Payments Annual Reports (TPAR) – What do you need to do by 28 August 2021?

Businesses that made payments to contractors or subcontractors during the 2020-2021 financial year may need to lodge a Taxable Payments Annual Report (TPAR) by 28 August 2021.

This reporting obligation, imposed on businesses operating in certain industries, requires those businesses to report to the ATO the details of all payments made to contractors and subcontractors during the last financial year. The information collected allows the ATO to identify contractors who are not meeting their own tax and GST reporting obligations.

The following industries are subject to TPAR:

• Building and construction services – Including plumbing, architectural, electrical, plastering, carpentry, engineering and a wide range of other activities listed here.
• Cleaning services – Including interior and exterior cleaning of structures, vehicles, machinery and cleaning for events.
• Courier services or road freight services – Including delivery of items or goods, the transportation of freight by road, truck hire with driver, and road vehicle towing services.
• Information Technology (IT) services – Including writing, modifying, testing or supporting software to meet a client’s needs.
• Security, investigation or surveillance services – Including patrolling and guarding people, premises or property; watching or observing an area, and monitoring security systems.
• Government entities

 

So, does your business need to lodge a TPAR?
 
This is determined by the breakdown of the business’ income from the 2020-2021 financial year. Your business will be subject to TPAR reporting if:

• 10% or more of your business’ income was derived from providing one of the above services (except building and construction)
• If you provide building and construction services, the threshold is 50%.

What payments are included?

The definition of contractors is broad, and includes payments made to subcontractors, consultants, and independent contractors operating as sole traders, companies, partnerships, and trusts.

What details do you need to report?

The details required to be reported on the TPAR can be found on the invoices supplied by the contractors. These details include contractors’:

• Australian Business Number (ABN) – if known
• Name and address
• Gross amount paid to them for the financial year (including any GST)

How do I report?

Accounting software providers can assist you with preparing and lodging your business’ TPAR yourself. Detailed instructions on how to prepare the TPAR can be found on various accounting software providers’ websites (see below for links to the most common providers).

• MYOB Essentials -> please click here
• MYOB AccountRight -> please click here
• Reckon -> please click here
• Xero -> please click here

If you are unsure if you need to lodge a TPAR for 2020-2021, or if you require our assistance with preparing and lodging your TPAR, please call or email us to discuss with a Macro Team member today.

Date Published: 11 August 2021.