If you are a business in the building and construction, or cleaning, courier industries you may be wondering how to generate in MYOB a Taxable Payments Annual Report (TPAR) – and when is the due date?
Here we look at what the 1 Australian Tax Office (ATO) requires and how to 2 Steps to set up and generate a Taxable Payments Annual Report from XERO software.
1 ATO Requirements
You may need to lodge a Taxable payments annual report by 28 August each year if you are a:
- Business in the Building and Construction industry;
- Business in the Courier and Cleaner industries;
- Government entity.
The Taxable Payments Annual Report notifies the ATO about payments you have made to contractors for providing services. Some government entities also need to report the grants they have paid and payments they make to certain other entities.
Contractors can include subcontractors, consultants and independent contractors.
They can be operating as sole traders (individuals), companies, partnerships or trusts.
See our post HERE, for more detail.
2 XERO – The steps to set up and generate the report are –
How to track reportable payments in XERO
Xero lets you identify payments to contractors that you need to include in the report. The report:
- Includes paid bills and spend money transactions (including overpayments and prepayments) from all accounts;
- Excludes credit notes and payments made in other currencies;
- Only includes organisations or contacts with Australian addresses.
You can filter out individual payments after you’ve run the report. If you’ve withheld tax because no ABN has been quoted you can either:
- Enter this manually on the paper report; or
- Continue to report it in your Activity Statements.
First you set up a Contact Group, then set up Rules, then Export the Report –
1 Create contact group
Create a contact group for contacts you’re needing to include in the Taxable Payments Annual Report, then add each contact to this group.
You can create more than one contact group if your Taxable Payments Annual Report is likely to produce more than 2500 invoice lines. Make sure your contacts belong to only one of the contact groups you’ve created.
If you don’t create a contact group, the rules you set up to run the report will find all contacts you’ve paid.
2 Set up or edit rules for contractors and reportable payments
The report identifies contacts you’ve made taxable payments to, based on the rule.
- In the Reports menu, select All Reports.
- Click Taxable Payments Annual Report.
- Select the year covered by the report.
- Select either:
- Set up Rules to set up your first set of rules, or
- Edit Report Rules to edit your rules.
- In Payments to, select either All contacts or an individual contact group you’ve set up for your Taxable Payments Annual Report contacts.
- In Paid from select either:
- All accounts (if you’ve selected an individual contact group in the Payments to dropdown), or
- An individual expense account from your chart of accounts.
- (Optional) Select Add Rule to add more rules, up to 12 in total. You can delete a rule by selecting x at the end of the Paid from field.
- (Optional) Select the Reset all previously deselected payments checkbox to reset any excluded payments or contacts.
- Click Save.
You can export the Taxable Payment Annual Report in either ATO or CSV format.
(i) ATO format
Submit your report to the ATO through their online services Business Portal.
- Check your contact details and organisation settings are complete. This includes your legal (trading) name, Australian Business Number, phone number, and a physical address in Australia.
- Click Export ATO Format.
(ii) CSV file
Click Export CSV to generate a report for your own review.
For example, you could use this to help you complete the ATO’s paper-based Taxable Payments Annual Report (ATO website).
You can’t submit the CSV file to the ATO.
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