Taxable Payments Annual Report (TPAR) for businesses in building & Construction Industry
Requirements by ATO
Businesses in building and construction industry are required to report total payments made to each contractor for building and construction services each year.
Report due date:
Due date: 28 August each year
This report is required from 2013.
Why does ATO require this report?
ATO use lodged report to aggregate each contractor’s reported income and compare those contractor’s actual lodged business activity and tax return. Any significant variance will result ATO audit. ATO uses this report to target those contractors who do not report their GST and income properly. ATO has audited thousands accounts to recover unpaid tax and GST since the launch of this program. As per ATO's statistics, over 50,000 businesses voluntarily reported additional income tax and GST liabilities of $2.3 billion for 2012-2013 financial year. Please see ATO's report on this program.
Who needs to report?
Any businesses operate in building and construction industry and make payments to contractors are required to report.
Please do note that only businesses operate in building and construction industry are required to report. Other businesses using construction services, like property manager, house owner’s renovation, etc are not required to report.
Who are contractors?
Contractors can be sole trader, partnership, company or trust.
What are building and construction services?
ATO is targeting building and construction services only (not actual goods purchase). These services mainly involve labor (unless labor is incidental) and also use of equipment, services included like:
Above are just some examples of construction services. ATO has a detailed list of work carried out covered under building and construction services. Please refer to the list to check if you are a contractor or not.
What are included in report?
What are payments excluded from report?
How does business generate/prepare the report?
Most software like MYOB and Xero have been updated with this report function, please refer to the details of each software to generate the report and bookkeeper needs to be aware of this report and necessary setup has to be made. Most software generate this report by group payments made to certain contacts. In Xero, the setup and report is pretty easy, which also uses contact group and/or accounts to create rules for generation of report. Please refer to the easy steps to setup and generate report in Xero.
Questions:
What if I made renovation of my house, do I need to report?
No, only businesses operate in building and construction industry need to report.
Does business report services to repair or maintain tools & equipments?
No, repair and maintenance of tools / equipments is NOT a building and construction services.
Does property manager/rental agent need to report?
No, even if property manager use services like plumbing, however they are not in building and construction industry, so they are not required to report.
Should you have any further questions regarding this, please feel free to contact us.
Businesses in building and construction industry are required to report total payments made to each contractor for building and construction services each year.
Report due date:
Due date: 28 August each year
This report is required from 2013.
Why does ATO require this report?
ATO use lodged report to aggregate each contractor’s reported income and compare those contractor’s actual lodged business activity and tax return. Any significant variance will result ATO audit. ATO uses this report to target those contractors who do not report their GST and income properly. ATO has audited thousands accounts to recover unpaid tax and GST since the launch of this program. As per ATO's statistics, over 50,000 businesses voluntarily reported additional income tax and GST liabilities of $2.3 billion for 2012-2013 financial year. Please see ATO's report on this program.
Who needs to report?
Any businesses operate in building and construction industry and make payments to contractors are required to report.
Please do note that only businesses operate in building and construction industry are required to report. Other businesses using construction services, like property manager, house owner’s renovation, etc are not required to report.
Who are contractors?
Contractors can be sole trader, partnership, company or trust.
What are building and construction services?
ATO is targeting building and construction services only (not actual goods purchase). These services mainly involve labor (unless labor is incidental) and also use of equipment, services included like:
- Architectural work
- Brick/block laying
- Cabinet making
- Cable laying
- Contreting
- Decorating
- Demolition
- Earthworks
- Electrical work
- Elevator and escalator installation
- Engineering
- Equipment rental with operator
- Fencing
- Plumbing
- Installation of all kinds
- Landscape of all kinds
- Roofing and guttering
Above are just some examples of construction services. ATO has a detailed list of work carried out covered under building and construction services. Please refer to the list to check if you are a contractor or not.
What are included in report?
- Reporting business's details
- Contractor’s ABN
- Full name (no matter sole trader, company, partnership or trust)
- Total payments made (including GST)
- Total GST component paid to contractor
What are payments excluded from report?
- Payments made to buy material to build or construct
- Unpaid invoices (Report is based on cash basis, only actually paid invoices are included in report.) The result is that unpaid invoices will be reported in following financial year in which payment is made.
- Payments made to employees, workers under voluntary agreement or under labor hire.
How does business generate/prepare the report?
Most software like MYOB and Xero have been updated with this report function, please refer to the details of each software to generate the report and bookkeeper needs to be aware of this report and necessary setup has to be made. Most software generate this report by group payments made to certain contacts. In Xero, the setup and report is pretty easy, which also uses contact group and/or accounts to create rules for generation of report. Please refer to the easy steps to setup and generate report in Xero.
Questions:
What if I made renovation of my house, do I need to report?
No, only businesses operate in building and construction industry need to report.
Does business report services to repair or maintain tools & equipments?
No, repair and maintenance of tools / equipments is NOT a building and construction services.
Does property manager/rental agent need to report?
No, even if property manager use services like plumbing, however they are not in building and construction industry, so they are not required to report.
Should you have any further questions regarding this, please feel free to contact us.
