The Taxable Payments Annual Report (TPAR) for payments made to contractors in the 2023-24 financial year is due by 28 August 2024. Certain businesses and government entities that make payments to contractors may be required to report these payments and lodge a TPAR with the ATO.
Read on to understand more about the TPAR system and whether your business needs to lodge a TPAR for the 2023-24 financial year.
What is the TPAR and Why Does it Exist?
Introduced in 2012, the TPAR initially applied only to the building and construction industry but has since been extended to cover additional industries. The TPAR system acts as a “check and balance” for reconciling payments made to contractors with what those contractors report as their taxable income. Information gathered through TPAR helps the ATO to:
- Identify contractors who do not meet their tax obligations and assist them in correctly reporting their income.
- Ensure businesses are not disadvantaged by competitors who don’t declare all their income.
Which Industries are Included?
Your business may need to lodge a TPAR if it makes payments to contractors for the following services:
- Building and construction
- Cleaning
- Courier
- Road freight
- Information technology
- Security, investigation, and surveillance
How Do I Know if I Need To Lodge?
The criteria for lodging a TPAR vary by industry. Generally, if your business provides services, makes payments to contractors or subcontractors, and has an ABN, you may need to lodge a TPAR. Consider the percentage of your business activity related to the relevant services and compare it against the industry-specific percentage requirement.
Payments to contractors can include those to subcontractors, consultants, and independent contractors operating as sole traders, companies, partnerships, or trusts. Individuals not running a business are not required to report payments for private services.
When is the TPAR lodgement due date?
The final date for TPAR lodgement for the 2023-24 financial year is Wednesday, 28 August 2024. Take prompt action to determine if you need to lodge and prepare your TPAR before the deadline.
What Details Need to be Reported?
To help with preparing your TPAR lodgement, it is important to keep accurate records of contractor payments throughout the year. The details that need to be reported about each contractor are generally found on the invoice you should have received from them in regards to the payment. This includes:
- name (business name or individual’s name)
- address
- Australian Business Number (ABN),
- amount you paid to them (including any GST).
You will need to calculate/report the total amount paid to each contractor for the financial year.
How to Lodge?
Depending on your situation and available resources, there are a number of ways to prepare and lodge your TPAR, such as online or paper format. You may be able to use your business software to create a TPAR data file for submission through the ATO Online services.
The tax accountants at The Quinn Group can advise and assist you to ensure that you meet your TPAR lodgement obligation.
Expert TPAR Help
As with any taxation or reporting obligation, it is important to take proactive steps to ensure that you are making submissions that are both correct, and on time.
The team of tax accountants at The Quinn Group can help you to navigate the TPAR reporting and lodgement requirements and process. We can assist you with all aspects – from determining whether you are required to lodge a TPAR, through to preparing and lodging the report.
Contact us on 1300 QUINNS (1300 784 667) or +61 2 9223 9166 or submit an online enquiry to arrange an appointment.
