If you have paid contractors and are in certain industries/services (even if only part of the services you provide) then you may need to submit the Taxable Payments Annual Report (TPAR) – here is all you need to know.
The TPAR reports to the ATO about payments that are made to contractors for providing services. Some government entities also need to report the grants they have paid in a TPAR.
Which industries – are you providing services (whole or part of your turnover, ex GST) in the following industries:
- Building (includes plumbing, architecture, electrical etc), since YE2015;
- Government entities since YE17;
- Cleaning, for YE19;
- Courier, for YE19;
- Road freight, for YE20;
- IT, for YE20;
- Security, for YE20.
Contractor types – subcontractors, consultants and independent contractors.
Contractor structures – as either sole traders (individuals), companies, partnerships or trusts.
What to report about each contractor are generally found on the invoice you should have received from them. This includes:
- Their Australian business number (ABN), if known;
- Their name and address;
- Gross amount you paid to them for the financial year (including any GST).
The ATO uses this information to identify contractors who haven’t met their tax obligations.
When to lodge – due 28 August annually
There are different Industries that need to report, and different start dates to begin reporting (see list above).
Mixed service business
If your business provides one or more of the relevant services as listed above, you may need to lodge a TPAR.
Each financial year, you’ll need to work out what percentage of payments you receive/sell, are from any of the services above.
If the total payments/sales are 10% or more of your GST turnover (or if you are primarily/mostly in the listed industries above) – you must lodge a TPAR.
Even if you are not registered for GST, you’ll still need to check if you need to lodge a TPAR. All businesses have a GST turnover, regardless of whether or not they are registered for GST.
Examples of the types of mixed businesses that may need to lodge a TPAR include:
- Building maintenance;
- Franchisees and retailers;
- Event management.
Calculate your current or projected GST turnover
If you’ve been operating your business for:
- The full financial year – use your current GST turnover for the year;
- Less than 12 months of the financial year – you must use your projected GST turnover by working out what your GST turnover will be for the next full financial year.
Your GST turnover is your gross business income (not your profit) excluding any:
- GST you included in sales to your customers;
- Sales that are not for payment and are not taxable;
- Sales not connected with an enterprise you run;
- Input-taxed sales you make;
- Sales not connected with Australia.
Read more at the ATO TPAR
Nothing to Lodge?
If you are not required to lodge, you can let the ATO know, to avoid unnecessary follow up.
Go here to lodge Nil online – https://www.ato.gov.au/TPARnilreport/
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