Tax practitioners have been urged to keep an eye out for business clients using more cleaning or courier contractors this holiday period as they could fall under new reporting requirements.
Holiday season contractor spike triggers TPAR concern
The ATO has warned that in the lead-up to the holiday season, it often sees businesses that provide mixed services making increased contractor payments to cleaning and courier services.
This increase might result in businesses needing to lodge a taxable payments annual report (TPAR) in August 2020.
Examples of businesses that might be making increased contractor payments include building maintenance, property management and event management businesses engaging contractors to provide cleaning services, and florists and other retail businesses engaging contractors to provide courier services.
Businesses providing mixed services will need to lodge a TPAR if payments they receive for cleaning or courier services make up 10 per cent or more of their total GST turnover, even if the business is not registered for GST.
“Check with your business clients who provide mixed services now to ensure they keep the right records to help them report when TPAR lodgement is due in August 2020,” the ATO said in an online update.
“This includes checking their contractors are working under a valid ABN.”
Businesses that provide cleaning or courier services lodged their first TPAR in August this year, joining businesses in the building and construction industry that have been doing so since 2012.
The road freight, security, investigation, surveillance and information technology (IT) industries are set to lodge their first TPAR due by 28 August 2020.
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