As you know, taxpayers need to lodge income tax returns each year to report their income and claim deductions and most businesses need to lodge business activity statements either monthly or quarterly.
Taxpayers may also need to lodge other reports where necessary. Examples include:
- other returns (e.g. FBT returns if fringe benefits were provided);
- PAYG withholding annual reports for amounts withheld from payments made to employees, non-residents and businesses that do not quote their ABNs (if such taxpayers do not use Single Touch Payroll (STP) reporting); or
- a finalisation declaration for taxpayers using STP reporting.
Another example of such a report is the TPAR. Businesses impacted by this measure must lodge the TPAR by 28 August 2019.
What is TPAR?
Businesses subject to TPAR must report all payments made to contractors including the contractor’s Australian business number (ABN), name, address and gross amount paid (including GST).
By using data matching (i.e. comparing this data to the data declared by contractors on their tax returns), these reports help the ATO to identify contractors who have not met their tax obligations (i.e. did not include all their income on their tax return, did not lodge tax returns, did not register for GST or quoted the wrong ABN on their invoices).
Payments made to employees are not subject to TPAR.
Are all businesses subject to TPAR?
No, only businesses providing certain kinds of services (i.e. industries believed to be operating in the cash economy) are subject to TPAR. The table below provides examples of those required to lodge their TPAR by 28 August 2019:
What about businesses providing mixed services?
Businesses providing mixed services (e.g. florists, building maintenance, event managers) are required to lodge a TPAR if:
10% or more of total GST turnover is from payments received from providing cleaning or courier services that are subject to TPAR; or
the business is primarily in the business & construction industry (e.g. 50% or more of business income is from building & construction services).
Businesses need to reassess each year if they are subject to TPAR (i.e. just because you were subject to TPAR last year does not mean you will automatically be subject to TPAR this year).
Although businesses providing road freight services, information technology (IT) services or security, investigation or surveillance services are subject to TPAR from 1 July 2019 (i.e. the start of the current year), their first TPAR is due to be lodged by 28 August 2020.
How can Findex help with your TPAR?
To reiterate, if your business provides building and construction services, cleaning services or courier services, you may have to lodge a TPAR by 28 August 2019.
To make it easier to complete your TPAR, Findex can review your current record keeping for contractor payments and may suggest potential changes to ensure you record the correct information necessary to complete your TPAR. We can also help by lodging your TPAR on your behalf.
If anything in this tax snapshot triggered your interest or you are a type of taxpayer (or know a taxpayer) that may need tax assistance, please contact your Findex adviser. Let Findex help you review your situation to ensure you are compliant with all your tax obligations.
We have considerable experience advising on a variety of tax issues that may be relevant for you or your business and look forward to discussing other ways we may be able to assist.
After all, your story is our business.
Through our Tax Advisory team across Australia, we can help you identify potential opportunities that may be available for you or your business while at the same time help you to manage your exposure to different risks.
Our Family Office Model means regardless of the location or service offering of your key relationship manager, we can access the right Tax Advisory expertise for you.