Taxable Supplier Payments – are you in the Building or Construction Industry? This is a Australian Taxation Office obligation.
How Do I Know If I Need to Prepare & Lodge Taxable Supplier Payments?
It is big brother of course. Businesses in the building and construction industry need to report the total payments they make to each contractor for building and construction services each year. You need to report these payments on the Taxable payments annual report by 28thAugust each year, which can be done from within most accounting software. To make it easier to complete the annual report, you may need to check the way you currently record your contractor payment information. The information reported about payments made to building and construction contractors is used in the ATO’s data matching program to detect contractors who have not either:
- lodged tax returns
- included all their income on tax returns that have been lodged.
It is for subcontractor’s labour/supply and fix component and generally not materials only.
One of the important aspects of TPAR is ABN checking and compliance. ABN’s should always be checked for new suppliers being paid by the business. A great feature built into MYOB when adding a new supplier, it automatically checks whether the ABN is valid and if it is registered for GST. It continues to surprise me that some sub-contractors still raise invoices with GST when they are not registered to do so.
The overall purpose of TPAR is to level the playing field between the legitimate business who do report, pay their income tax, SGC, PAYG W and GST compared to those working outside of the system. Great work here being done by the ICB and keeping the bookkeeping industry informed.