The taxable payments annual report (TPAR) due date is coming up on August 28 2020. It is vital that, if your business is required to lodge a TPAR, you prepare for this date. You may also want to speak to your accountant to ensure you fulfill all obligations you may have.
To help out small business owners we have created this guide to let you know whether your business could be affected by TPAR and what you will then need to do.
What is TPAR?
TPAR is an industry specific report which certain businesses are required to lodge with the ATO to report total payments they have made to subcontractors for services. From there, the data will be matched to the annual income declared by the contractor to assist in improving tax compliance at the subcontractor level.
The TPAR reports can be used by the ATO to help identify if a contractor hasn’t included all their income on their tax return, failed to lodge tax returns, quoted an incorrect ABN, or have not registered for GST. The TPAR is designed to ensure a fair playing field for all subcontractors so those who neglect their tax obligations do not have an advantage over those who follow the rules.
Who needs to be aware of TPAR?
If your business provides any of the following services or you pay contractors or subcontractors for these services you may need to lodge a TPAR by 28 August. These services include:
- Building and construction
- Courier or road freight
- Information technology
- Security, investigation and surveillance.
What needs to be included on your TPAR?
On your TPAR you will need to include the following details about each contractor you paid:
- Their name
- Their address
- Their Australian Business Number (ABN)
- The total amount paid to them, including GST.
The details you need to report should be on the invoices you used to claim GST credits on your BAS. If you complete your TPAR at the same time as your BAS you can just use the same records.
How to lodge your TPAR
There are a few ways to lodge your TPAR. You should choose the option that best works for you and your business. They are:
- Your business accounting software
- The ATO Business Portal
- Your myGov account if you are an individual or sole trader
- Your registered tax professional.
It is simple to lodge your TPAR through Xero, provided dates have been configured correctly and all payments to subcontractors were correctly accounted for during the year.
If you are a Link client we will handle your TPAR for you, ensuring it will be lodged on time. If you need assistance in preparing your TPAR, reach out to Link Advisors for a chat.