So many acronyms that we need to deal with, so what exactly is a TPAR, why do we need them, who needs to worry about it and when does it need to be lodged?

 

What:

TPAR stands for Taxable Payments Annual Report.

It reports to the ATO payments made to subcontractors, consultants or independant contractors who provide services to you in certain industries and will include those that operate as sole traders or from other entities.

You need to report total payments made including both labour and materials except where the invoice

• is for incidental labour or materials only.
• has not been paid at 30 June
• does not quote an ABN and you have reported on a PAYG summary
• is for payments under a labour hire arrangement.

You need to include details such as the contractors:

• Name
• Address
• ABN
• Amount paid (including GST)

 

Why:

The ATO is trying to identify contractors who may not be meeting their tax obligations. Data reported on TPAR reports will show on each contractors ATO information to ensure they are including all income when preparing their returns. This helps businesses by ensuring those not reporting income correctly are not competing on an uneven playing field.

 

Who:

You will need to lodge a TPAR if you pay contractors who provide services on your behalf

-building and construction

-cleaning

-road freight

-courier

-security or surveillance

-Information Technology

 

When:

The due date for lodgement is 28 August each year but if you have missed the deadline you should still lodge ASAP to ensure penalties are minimised.

 

How:

You can lodge via SBR enabled software such as Xero or MYOB, using your Online services for business OR you can ask your bookkeeper or tax agent to help.

 

 

Contact Alto if you need clarification around your requirements to lodge or assistance with the lodgement process.

Author: Donna Bruce