Paid contractors in the last year?
You may need to lodge a Taxable payments annual report (TPAR) by 28 August each year if you are a:
- business providing
- building and construction services
- cleaning services for contractor payments from 1 July 2018 (first report due by 28 August 2019)
- courier services for contractor payments from 1 July 2018 (first report due by 28 August 2019)
- road freight services for contractor payments from 1 July 2019 (first report due by 28 August 2020)
- information technology (IT) services for contractor payments from 1 July 2019 (first report - security, investigation or surveillance services for contractor payments from 1 July 2019 (first report due by 28 August 2020)
- mixed services (a business that provides one or more of the services listed above)
- government entity.
The TPAR tells 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.
Contractors can include subcontractors, consultants and independent contractors. They can be operating as sole traders (individuals), companies, partnerships or trusts.
The details you need 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 use this information to identify contractors who haven't met their tax obligations.
If your business provides one or more of the relevant services listed above, you may need to lodge a TPAR.
Each financial year, you'll need to work out what percentage of payments you receive are from any of the above services.
If the total payments are 10% or more of your GST turnover (or if you are primarily in the building and construction industry) – 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.