The ATO recently announced changes to the Taxable Payment Annual Report (TPAR) scheme that will have consequences for particular types of business groups.

In particular, building and construction businesses need to report their payments to contractors via the annual TPAR, and now cleaners and couriers will also need to lodge a TPAR report for the 2018/19 Financial Year by 28 August 2019.

There have been a lot of questions coming up from clients and colleagues lately on this topic, so I wanted to address them in summary in this article. Here are the answers to the FAQs that have come up most, so you can stay up-to-date.

Why did the ATO set up TPAR?

The ATO has established the TPAR scheme so that they can check that contractors are reporting ALL their income correctly via their tax returns.

Which types of business need to lodge a TPAR?

• building and construction services
• cleaning services – for contractor payments from 1 July 2018 (your first report is due 28 August 2019)
• courier services – for contractor payments from 1 July 2018 (your first report is due 28 August 2019)

The ATO includes services such as bricklaying, plumbing, fencing and it also includes architectural work (including drafting and design), decorating (including painting), engineering and landscaping construction in the category of building and construction services.

You can check the ATO website to find out if your business is required to lodge a TPAR.

What does this mean for Tradies?

A TPAR only has to be lodged if a Tradie engages sub-contractors. If they do, they now have to report each year to the ATO all payments made to their sub-contractors throughout the financial year.

What information do I need to provide?

• their Australian business number (ABN)
• their name and address
• gross amount (before tax amount) you paid to them during the financial year (including any GST).

What is the best way to report TPAR?

The best way to lodge your TPAR is by producing a report from your accounting system. However, in order to produce accurate reports you need to set up the Contractor file with the required information as listed above.

Can my Bookkeeper help me with this?

Yes. The latest releases of accounting software like XERO and MYOB have these reports already built in. All you need to do at the time of lodgement is to produce the report and get your accredited bookkeeper or accountant to lodge them on your behalf.

Get started today and contact us for a FREE Accounting System File Review to see if you are TPAR ready.

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