Taxable payments annual reports (TPAR) are due by 28 August this year, with businesses that provide cleaning or courier services set to lodge for the first time, joining businesses in the building and construction industry that have been doing so since 2012.
As of early August, over 30,000 businesses have already lodged a TPAR for 2018–19 or told the ATO that they are not required to lodge.
ATO assistant commissioner Peter Holt said businesses outside the cleaning and courier industries could be required to report if payments they received for cleaning or courier services make up 10 per cent or more of their total GST turnover.
In practice, this means that if the payments the business receives for cleaning or courier services are only a minor part of their overall turnover, then it is unlikely they will need to lodge a TPAR.
“Payments made to contractors or subcontractors who have provided cleaning or courier services on behalf of businesses in these industries in the 2018–19 financial year must be reported to the ATO — including cash payments,” Mr Holt said.
Pitcher Partners partner Craig Whatman had earlier told Accountants Daily that a wide range of businesses could come under the scope.
“The ATO’s draft law companion ruling considers the rules in relation to restaurants using delivery services, florists supplying bouquets online, retailers who have goods sent to customer homes through a distribution service, gardeners and even event organisers who might get a venue cleaned as part of their service,” Mr Whatman said.
“There are a few things you need to assess, including whether the service is integral to the supply of your goods and services, and that can come down to a technical argument about whether you as a florist, for example, make one supply of flowers or two supplies — flowers and then delivery.
“The key for a business is to understand exactly their contractual terms with their customers, whether these services are integral or ancillary to their business, and exactly what proportion of their income is from these services so they can calculate their annual amounts.”
With TPRS now extended to the road freight, security, investigation, surveillance and information technology (IT) industries, Mr Holt said data from TPAR will allow the ATO to identify contractors who may not be doing the right thing, including not reporting income, failing to lodge tax returns or activity statements, not registering for GST or using false ABNs.
Reporting for the new industries will be due by 28 August 2020, covering the 2019–20 financial year.
“TPRS prevented $2.7 billion from being lost to the black economy in the 2015–16 financial year, so it’s a very effective way for us to tackle the black economy and keep things fair for businesses who we know are doing the right thing,” Mr Holt said.
“The Black Economy Taskforce estimates that the black economy is costing the community as much as $50 billion, which is approximately 3 per cent of gross domestic product (GDP). TPRS is all about keeping the system fair for these industries.”
The ATO’s new online services for agents now has added functionalities in relation to TPAR, with agents now able to lodge online and view due lodgements.
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.