If your business falls under any of these industries you likely engage with contractors, and therefore the Taxable Payments Reporting System (TPRS) obligations should be on your radar at this time of year.
The TPRS was originally introduced to better track whether contractors in the building and construction industry were meeting their individual taxation obligations. The government has now expanded this to include the courier and cleaning industry. So businesses in these industries are required to record and report on the payments made to each separate contractor during the year.
Below is a more detailed description of the industries affected by the TPRS and what needs to be reported.
Further industries are being considered for the TPRS and were mentioned in 2018-19 budget. These include security providers and investigative services, road freight transport, and computer system design and related services from 1 July 2019.
This is done via a Taxable Payments Annual Report (TPAR), which tells the ATO about payments you have made to contractors for providing services and is to be completed and lodged with them by 28 August of each year.
The term contractor can include subcontractors, consultants and independent contractors. These contractors can be operating as sole traders, through a company, trust or partnership.
The information you are required to report in the TPAR for each contractor needs to fall within the financial year (1 July - 30 June), and is generally found in the invoice you receive from them:
There are certain payments that are not required to be reported with a TPAR, these include:
The TPRS is ever-changing, and as mentioned above, new industries are being included within the reporting obligations for the 2019 and 2020 financial years.
Make sure your business is complying with its reporting obligations. Get in touch with our team at BLG Business Advisers online or by calling (02) 4229 2211.