TPAR lodgements are fast approaching

Taxable Payments Annual Report (TPAR) are an industry specific report companies need to complete stating the total payments made to contractors for their services. Taxable payments to contractors are one of the key reporting obligations small to medium size businesses need to pay attention to. The ATO uses this information to data match the annual income declared by contractors and help improve compliance.

From these reports the ATO can identify if a contractor has omitted income in their tax return, failed to lodge a tax return or activity statement, quoted an incorrect ABN on their invoices, or failed to register for GST.

Should your industry be reporting TPAR?

No – not all businesses are required to lodge a TPAR. If your business provides the following services, you may be required to submit a TPAR report:

What are the reporting requirements for TPAR reports?

If you are required to report your businesses taxable payments, you will need to be aware of your industry specific obligations. Generally, a TPAR will be required if the following statements apply to your business:

  • You hold an Australian Business Number (ABN); and
  • You have made payments to contractors for services that have been completed on your behalf.

What payments need to be reported?

Not all payments need to be reported. Payments that do not need to be included on the TPAR include:

  • Payment for materials only;
  • Payments within consolidated groups;
  • PAYG withholding payments;
  • Contractors who do not provide an ABN;
  • Payments for private and domestic projects;
  • Incidental labour; and
  • Invoices that are unpaid as at 30 June.

What details need to be included?

When completing the TPAR you will need to include the following Payee details;

  • ABN (where known);
  • Address;
  • Name (business name/individual name); and
  • Total amounts for gross amount paid, total GST paid, total tax withheld when ABN wasn’t quoted.

Government entities have the following additional reporting requirements:

  • Whether a ‘statement by a supplier’ was provided; and
  • Details of grants paid to organisations or people with an ABN, including the date the grant was paid and the name of the grant.

How does TPAR lodgement work?

TPARs need to be submitted to the ATO by 28 August each year.  Penalties maybe applied if they are not completed by this date.

If you need assistance with preparing your TPAR, the team at Sphere are here to help.  Please just call our office and we will ensure your compliance and keep the ATO off your back (03) 8899 6399.