The ATO is reminding owners of businesses that provide various services to lodge their taxable payments annual report (TPAR) for the 2019–2020 income year. It estimates that around 280,000 businesses were required to lodge a TPAR for the 2019–2020 financial year, but at the beginning of March around 60,000 businesses still had not complied with the lodgement requirements. The reports were originally due on 28 August 2020. To avoid possible penalties, these businesses are encouraged to lodge as soon as possible.
The ATO notes that many businesses that have engaged delivery services (including food delivery services) though a contractor/subcontractor may not know they have to lodge a report.
TIP: Your business doesn’t need to provide the relevant services exclusively to be captured under the TPAR system – if you only provide the service for a part of the year, or even if it is only a small part of your business, you may be required to lodge a TPAR.
The TPAR was introduced to combat the “black economy” which is estimated to cost the Australian community around $50 billion, or 3% of gross domestic product (GDP). It is designed to help the ATO identify contractors or subcontractors who either don’t report or under-report their income (eg through hiding amounts received as “cash in hand”).
The report is required for businesses that make payments to contractors/subcontractors and provide any of the following services:
- building and construction;
- cleaning services;
- courier services, including delivery of items or goods (letters, packages, food, etc) by vehicle or bicycle, or on foot;
- road freight services;
- IT services, either on site or remotely;
- security, investigation or surveillance services.
For example, during the past year many eateries, grocery stores, pharmacies and other general retailers pivoted to providing home delivery for their customers. As such, they may have needed to engage contractors or subcontractors to provide courier services. If the total income received for these deliveries or courier services amount to 10% or more of their total business income, they will be required to lodge a TPAR even though they may not have needed to do so previously.
If your business is required to lodge a TPAR, the details you’ll need to report about each contractor should be easy to find and are generally contained on the invoice you receive from them. This includes details such as their ABN, name and address, and the gross amount paid for the financial year (including GST).
TIP: Think your business may needed to lodge a TPAR ASAP? If you’re not sure or just need some help with lodging the report, we have the expertise to help you.