Taxable Payments Annual Reports are industry-specific business reports on total payments made to contractors for services. It’s similar to payment summary for contractors. Contractors can include consultants, independent contractors and contractors and operate as sole traders, partnerships, companies or trusts.
Taxable Payments Annual Reports
TPAR was initially introduced on 1 July 2012 and first applied to the building and construction industry. It was expanded to other sectors starting 1 July 2018. Payments to contractors are reported to the ATO via the TPAR. The ATO will use this info to match the annual income stated by contractors to ensure compliance.
TPAR helps identify if a contractor has declared all their income on the tax return or if he or she has failed to lodge a tax return or BAS, quoted a wrong ABN on invoices or failed to register for GST. If your business offers cleaning services, building and construction services, IT services, courier or road freight services, security, investigation or surveillance services, you may need to submit a TPAR.
A TPAR is required if you have an ABN and you’ve paid contractors for services they have completed on your behalf. Not all payments must be reported such as payment for materials, incidental labour, unpaid invoices as on 30 June each year, payments within consolidated groups or for private and domestic services and PAYG withholding payments. You need to report a contractor’s ABN, name, address and gross amount you’ve paid to them for the FY including any GST.
You are required to lodge your TPAR every 28th of August or you could incur penalties. You can manually lodge through an ATO form, lodge online through an ATO Business Portal or Tax Agent Portal or lodge via a business software like Xero.
If you need help with completing your TPAR or preparing and lodging the form, please get in touch.
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