What you need to know about the Taxable Payments Annual Report

If your businesses made payments to contractors and subcontractors during the financial year, these payments must be reported in your Taxable Payments Annual Report (TPAR). The Report must be made by August 28 each year, so now’s the perfect time to get up to speed on what this actually means for your business. 

What you need to report. 

Contractors and subcontractors for this Report fall into a number of categories. You must report the following: 

• Building and construction services. 
• Cleaning services. 
• Courier services. 
• Road freight services. 
• IT services. 
• Security, investigation, and surveillance services. 

The information supplied must include the total payment amount if an invoice you receive from a contractor includes labour and materials. 

To help you track payments here, the ATO has a free reporting worksheet you can use. Simply download the PDF online and enter the details of payments to contractors for services. This sheet does not need to be submitted to the ATO — it’s for internal purposes only. However, you’ll need to refer back to it when it’s time to submit your TPAR. 

What you don’t need to report. 

Some payments aren’t required to be submitted in your TPAR. This includes: 

• Payments for materials only. 
• Incidental labour. 
• Unpaid invoices after 30 June (only report payments you made on or before 30 June each year). 
• Workers engaged under a labour-hire or on-hire arrangement. 
• Pay as you go (PAYG) withholding payments (don’t report payments to employees. Report these payments through the PAYG withholding annual report or Single Touch Payroll). 
• Payments to foreign residents for work performed in Australia. These are generally subject to PAYG foreign resident withholding. However, if the payments aren’t subject to PAYG withholding, then you need to report them in a TPAR. 
• Foreign residents for work performed overseas. 
• Contractors who do not provide an ABN — in this case, you may need to withhold an amount from the payment for that supply under the PAYG withholding arrangements 
• Payments in consolidated groups. 
• Payments for private and domestic projects. 

How to lodge your TPAR. 

Your Report can be lodged directly to the ATO online through specific software. Sole traders and businesses can use business software if its SBR-enabled software, or your business can create a TPAR data file to the required TPAR specifications. Simply lodge through Online services for business using the file transfer function. 

If you do not have business software, use online services for business. To use this service, you need an ABN and a secure credential myGovID and Relationship Authorisation Manager (RAM). Select Lodgments then Taxable Payments Annual Reporting. 

You can also use: 

• online services for individuals and sole traders. Select Tax, Lodgments and then Taxable Payments Annual Report. 
• Your tax or Business activity statements (BAS) agent. 
• Paper form. 

We can help you with your TPAR. 

If you need guidance, get in touch with us before August 28, and Ascent Accounting can help lodge your business’s TPAR. Start the conversation here.