If your business makes payments to contractors or subcontractors you may need to lodge a Taxable Payments Annual Report (TPAR) by 28 August each year.
The ATO has recently expanded the need to report on payments to sole trader / freelancer contractors via a Taxable Payments Annual Report (TPAR). TPAR lodgement is required by 28 August, unless you have an agreed extension.
If you want us to lodge a TPAR (at a cost of $180) on your behalf you can provide us the details of the contractors to be included via our TPAR Form.
See the ATO explanation of Why they are collecting information about payments to contractors for more information but, in essence, it’s to ensure that all income is being correctly declared by those contractors. It’s also important to note that if your business is regularly paying contractors, especially as a consistent monthly amount, they can be deemed to be employees under Personal Services Income (PSI) provisions including the need to pay superannuation and other employee obligations … on top of any contractor payments.
The industries now captured under this reporting regime now include:
- Building and construction services
- Courier or Road freight services
- Cleaning services
- Security, investigation, or surveillance services;
And: most relevant to startup’s:
The general criteria is if your business can be deemed to have 10% or more of your turnover derived from the provision of those services then you are required to lodge a TPAR.
The information you are required to provide to the ATO is:
- Contractor name, and address
- Contractor ABN
- Amount paid to the contractor for the year.
Each year we will ask you to provide a list of the contractors you wish to include in the TPAR. If we are doing your bookkeeping and capturing contractor invoices via Receipt Bank / Xero we just need the contractor name, and we can obtain the necessary Address, ABN and payment amounts from Xero. Otherwise we will need you to supply all these details from the contractor invoices for reporting to the ATO.