There are certain businesses that need to report the total payments they make to contractors each year on the Taxable Payments Annual Report (TPAR). The TPAR needs to be lodged with the Australian Taxation Office (ATO) by 28 August each year.
TPAR was introduced in 2012 and initially covered the building and construction industry. It has now being extended to cleaning and courier businesses.
From 1 July 2019 the TPAR payments reporting system has extended to the Information Technology (IT); road freight and security; investigation and/or surveillance services. For these industries the first report is due by 28 August 2020
IT services that are required to lodge TPAR include IT consulting, computer network system design and integration, computer programing, computer hardware/ software consulting, computer facilities management, internet and web design consulting, software development, software installation, software simulation and testing and system analysis, etc.
Road freight, security services, investigation or surveillance services that are required to lodge TPAR include body guarding or close personal protection, night watch, alarm monitoring and response, crowd, event or venue control, operating a security control room or monitoring centre, operating security equipment (e.g. prohibited item detectors, x-ray scanners and explosive trace detection), and detective agency services.
Contractors can include subcontractors, consultants and independent contractors. They can be operating as sole traders (individuals), companies, partnerships or trusts.
The details that need to be reported about each contractor are generally found on the invoice you should have received from them. This includes:
- their Australian Business Number (ABN),
- their name and address
- gross amount you paid to them for the financial year (including any GST).
TPAR information is used by the ATO to identify contractors who haven’t met their tax obligations. If your business provides one or more of the relevant services listed above, you may need to lodge a TPAR. An individual not running a business is not required to report payments made to contractors for private services.
If you require any further information, please contact one of our tax accountants on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to arrange an appointment or teleconference. Alternatively, please click here to submit an online enquiry form.