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Lodging Your Taxable Payments Annual Report

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Prepare now for your Taxable Payments Annual Report (TPAR) lodgement.

Businesses in certain industries who pay contractors or subcontractors need to report to the ATO the total payments made to each contractor on a TPAR at the end of the financial year. This form is due by the 28th August.

TPAR Explained

What does TPAR stand for?

TPAR stands for Taxable Payments Annual Report.

Why was the TPAR created?

To ensure that all contractors are reporting correctly to the Australian Taxation Office. Contractors can include subcontractors, consultants and independent contractors. They can operate as sole traders (individuals), companies, partnerships or trusts. The information sent to the Australian Taxation Office identifies contractors who are incorrectly reporting their income or not meeting their tax obligations.

Who needs to lodge a TPAR?

Businessess that made payments to contractors or subcontractors for the following services:

  • Building and construction services – plumbing, architectural, electrical, plastering, carpentry, engineering etc.
  • Information technology (IT) services – this includes writing, modifying, testing or supporting software to meet a client’s needs, whether on-site or off-site through the internet.
  • Courier services or road freight services– Any transport that requires labour, including couriering via bicycle.
  • Cleaning services – interior and exterior cleaning of buildings, transport, machinery, and cleaning for events.
  • Security, investigation or surveillance services – patrolling, guarding people, premises or property; monitoring security systems, and any investigation specifically related to security and surveillance.

For a comprehensive list of the industries, please visit the ATO Website here.

There are a number of supplier details required in the TPAR.

Once you are clear about which suppliers have to be reported on the TPAR and which (if any) can be excluded, you need to ensure you have accurate records.

  • Check that you have current details for relevant suppliers: ABN, business name and business address.
  • Check your supplier reports for the gross amount paid in the financial year and the amount of GST included.
  • Have your suppliers quoted the correct ABN and GST registration status on their invoices? You can verify if their provided details are correct by using ABN Lookup or by checking if the ABN from their invoice matches your record.
  • Do you have tax invoices for all supplier business-related transactions?

The ATO may also ask for other contractor information such as phone number, email address and bank account details (if paid through electronic bank transfer).

When is the TPAR due?

The TPAR is ultimately targeted at compliance for contractors but it can result in compliance issues for your business.

The due date for lodging the TPAR report is 28 August every year. It is essential to lodge on time as the Australian Tax Office uses TPAR to pre-fill the income tax of sole traders, post information on ATO online platforms, and identify contractors who are not complying with their tax obligations.

In addition, ATO has increased its focus on TPAR obligations of businesses that pay contractors and has announced the imposition of penalties on businesses that:

  • have overdue TPAR
  • were notified about their overdue TPAR through three non-lodgement letters
  • do not respond to ATO’s call about their overdue TPAR.

How can I lodge TPAR?

Xero and most other accounting software programs allow for the easy setup and maintenance of TPAR relevant supplier groups, making the annual report preparation quick and easy.

It is a good idea to ensure that your Xero file is setup to easily capture the required information during the year as you transact, so that there is no need to work back through a year of data to prepare these reports by the annual deadline.

Talk to Balanced Beans about setting up taxable payments reporting in your Xero software for the lodgement of your TPAR.

Get Help With Your ATO TPAR Lodgement

If your business makes payments to contractors or subcontractors, you may need to report these payments by lodging a TPAR with the ATO.

Talk to Balanced Beans about arranging for our experienced Accountants to prepare and submit your report.