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How the Taxable Payments Reporting System is benefitting all Australians

A fair and transparent tax system means a level playing field for everyone. That’s why the Taxable Payments Reporting System (TPRS) is so important — creating a level playing field allows honest businesses to compete fairly.

The black economy costs the community as much as $50 billion every year, which puts pressure on Australians who are doing the right thing. In 2015-16, the TPRS helped protect $2.7 billion being lost to the black economy in the building and construction industry alone.

The TPRS now also applies to businesses providing the following services, even if they are only part of their business activities:

  • cleaning
  • courier or road freight
  • information technology
  • security, investigation or surveillance.

Under the TPRS, if you provide any of the above services and you pay contractors to perform them on your behalf, you may need to report the payments (including cash) made to the contractors.  The ATO then uses this information to check that the contractors are reporting all their income.

The Taxable payments annual report (TPAR) is due by 28 August each year. ATO Assistant Commissioner Peter Holt has five handy tips for businesses to help make completing the TPAR quick and easy:

  1. “If you’re not sure whether you need to complete a TPAR or if you have questions, follow our three-step guide at ato.gov.au/TPAR or you can talk to your registered tax professional.”
  2. “Make sure you’re keeping the right records for each contractor – their name, address, ABN, and the total amount you paid them, including any GST. The ATO is committed to helping you understand and meet your obligations and has new record-keeping guidance for businesses needing to complete a TPAR.”
  3. “If you use accounting software, check if it’s TPAR-ready. Talk to your software provider if you are unsure. If you don’t have TPAR-ready accounting software, visit ato.gov.au/TPARworksheet for a simple worksheet that can help you to record the information.”
  4. “If your business provides a range of services – known as ‘mixed services’ – you may need to report if payments you received for TPRS services make up 10 per cent or more of your total GST turnover, even if your business isn’t registered for GST.”
  5. “Watch our new video on how to lodge.”

Importantly, if you’ve been affected by a disaster such as a cyclone, flood, bushfire or storm, the ATO understands that your priority at this time is your family and community. If you have been impacted, visit our dedicated webpage Bushfires 2019–20 or phone us on 1800 806 218.

Key points

  • Under the Taxable Payments Reporting System (TPRS), if you provide any TPRS services and you pay contractors to perform them on your behalf, you may need to report the payments made to the contractors.
  • The TPRS applies even if these services are only part of your business activities.
  • Does your business provide a range of services? If these include any TPRS services, you may need to lodge a Taxable payments annual report (TPAR).
  • You’ll need to lodge a TPAR if the payments you received for TPRS services make up 10 per cent or more of your total GST turnover.
  • If you’re 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 they are registered for GST.
  • The Taxable payments annual report (TPAR) is due by 28 August each year.
  • “Contractors” include subcontractors, consultants or independent contractors. They can be individuals, partnerships, companies or trusts.
  • Payments to employees are not included. This means that if you engage a worker and withhold Pay as you go (PAYG) from their pay, you do not include them in the TPAR.
  • The ATO uses TPAR data to identify contractors who haven’t lodged tax returns or haven’t included all their income.
  • Businesses should visit ato.gov.au/TPAR for information and resources.

 

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