Lets talk TPAR
What is TPAR and who does it affect?
TPAR – otherwise known as Taxable Payments Annual Report is the lodgement of the TPAR report to the ATO by the 28th of August which is a list of payments made to contractors who provide the following services:
- Building and construction
- Courier and Road Freight
- Information Technology (IT)
- Security, investigation or surveillance
It’s important to lodge on time, as the ATO use the reported information to:
- pre-fill information for sole trader contractors to help them prepare their income tax returns
- make the information available in the Reported transactions service in ATO online platforms
- identify contractors that aren’t meeting their tax obligations.
Things to watch out for:
When we enter supplier bills when labour / contractor hire has been added we always split the cost of materials out from the labour as to the business who is expensing would do the split expense accounts, same as the company producing the invoice to start with – the contractor. By not splitting this out you could overstate the income received into the contractors prefilled information.
Businesses and government entities who make payments to contractors may need to report these payments and lodge a Taxable payments annual report (TPAR).
Contractors can include subcontractors, consultants and independent contractors. They can operate as sole traders (individuals), companies, partnerships or trusts.
For more information on lodging, requirements or finding out if you need to lodge, contact our office on 1300727375 or email: firstname.lastname@example.org and one of our friendly team will be able to assist you in working out if you have to report TPAR for your contractors or not and you can also reach out to the ATO for more in depth information on TPAR reporting requirements.