If you are a business that provides cleaning or courier services, you will now need to lodge a Taxable Payments Annual Report (TPAR) to inform the ATO about your payments to contractors.
The report will need to be completed, even if only a small portion of your income comes from cleaning or courier services.
The term ‘contractors’ can include subcontractors, consultants and independent contractors. They may be operating as sole traders (individuals), companies, partnerships or trusts.
In the past, this type of reporting was only relevant to those in the building and construction industry. However, the new legislation extends the taxable payments reporting system much further to include cleaning and courier services.
The ATO will use the information to ensure that contractors are reporting all of their income and meeting their tax obligations.
So what exactly do you need to do?
You must keep all of your records about payments made to contractors. More specifically, the information you need includes:
- Their ABN
- Their name and address
- Gross amount you paid them during the financial year (including GST).
If your business is required to lodge a TPAR, it will need to be lodged before 28 August 2019 and should include all payments made to contractors between 1 July 2018 and 30 June 2019. The report can be lodged online or by a paper form.
If you provide cleaning or courier services and do not believe that you need to lodge a TPAR, because you have not made any payments to contractors, you will still need to lodge a nil report with the ATO.
Our Tax Champions are equipped with the correct knowledge and experience to assist you through this process. If you require any assistance, contact Paris Financial on (03) 8393 1000, and we will be happy to help.