A reminder that if your business is required to lodge a Taxable Payments Annual Report (TPAR), the upcoming deadline for lodgement is 28 August 2024. Prepare your report ahead of time, ensure all required information is accurate, and submit it to the ATO to avoid penalties.
What is a TPAR?
The TPAR is a reporting requirement designed to capture information on payments made to contractors and subcontractors in specific industries.
The primary goal of TPAR is to reduce tax avoidance by contractors operating in industries that the ATO deems high risk for tax avoidance.
The TPAR is particularly relevant for businesses in the following sectors:
- Building and construction services;
- Cleaning services;
- Road freight and courier services;
- Information technology services; and
- Security, investigation or surveillance services.
For these industries, businesses are required to report details of payments made to contractors and subcontractors. This report helps the ATO cross-check the income declared by these contractors and ensures that all taxable income is accounted for.
Who needs to lodge a TPAR?
You must lodge a TPAR if:
- You made payments to contractors for a relevant service during the year
- 10% or more of your business income for the financial year is from a relevant service.
– The exception to that rule is building and construction businesses, which need to lodge a TPAR only if they earn 50% or more of their income from the services of contractors.
Even if you believe that your business may not meet the specific criteria, it’s important to review the requirements to confirm your lodgement requirements.
What information must be included in the TPAR?
The TPAR requires businesses to report:
- The total amount paid to each contractor during the financial year.
- The contractor’s details, including their name, ABN, and address.
- The type of services provided.
Key deadlines for TPAR lodgement
The TPAR must be lodged annually, with the deadline generally falling on 28 August following the end of the financial year. For example, for this financial year ending 30 June 2024, the TPAR will be due by 28 August 2024.
It’s important to prepare your report in advance. Late lodgement of TPAR can result in penalties imposed by the ATO.
Final reminder
Further information can be found on the ATO website: Taxable payments annual report (TPAR).
Please contact one of our advisors if you have any questions or require assistance with your TPAR reporting requirements.
Credit Co-Author: Raymond Mach – Tax Consultant Melbourne.