TPAR stands for Taxable Payments Annual Report, and must be lodged by 28 August each year for the following business types:
- Building and Construction (including associated services)
- Cleaning Services
- Road Freight & Courier Services
- Information Technology Services
- Security, investigation or surveillance Services
If your business falls into the above category, you will need to lodge your TPAR Report, and preparation for this needs to start now, if you haven’t already.
Don’t wait for 30 June 2022 to check your sub-contractor information. Look at your Xero or MYOB and make sure you are recording the right information for each contractor you pay, to make the TPAR preparation easier.
You do not need to report invoices from a sub-contractor, if the invoice was for materials only.
Make sure you have the following: (1) name, (2) address, (3) ABN, and (4) amount paid. For amounts paid, the ATO wants to know how much you paid them in the 2022 tax year, and this can be printed off your accounting software. You need to have your sub-contractor’s ABN in your accounting software, in the supplier card; if you don’t have a record of their ABN, you should be withholding an amount from the payments you make them, and reporting that in your BAS statements.
If you have an overseas sub-contractor, then you should have additional contact and address details as they won’t have an ABN.
The ATO is serious about following this up, in the 2022 tax year. Starting 23 March 2022, the ATO will be applying penalties for the following:
1. Failure to lodge 2021 or prior year TPAR
2. Recipients of three non-lodgement letters about their overdue TPAR and do not respond to the ATO’s follow-up phone call about their overdue TPAR
For more information, please see the ATO website at Taxable payments annual report | Australian Taxation Office (ato.gov.au)