TPAR is a part of the taxable payment reporting system (TPRS) obligations that apply to businesses in building and construction, cleaning, courier, road freight, information technology and security, among others. 

Early this year, the ATO state that from 23 March 2022, they will apply failure to lodge penalties to organisations who have TPAR requirements that are overdue. And recently, The ATO have warned that they will be focusing on off the-books payments to contractors. 

The Assistant Commissioner, Peter Holt, said that “the ATO has sophisticated data and analytics to identify businesses that fail to lodge a TPAR.

“Not reporting payments to contractors may be seen as a red flag and will prompt closer scrutiny from the ATO on your own affairs as well as those of your contractors.

“Businesses and tax professionals can view the data the ATO receivies about their business, like taxable payments reported under the TPRS, as a reported transaction in ATO Online platforms.”

What do you need to report?

You need to report the following information about each contractor:

• ABN
• Name & Address
• The gross amount you paid them for the financial year (including any GST)
• Total tax withheld where ABN was not quoted

Payments you need to report

You are required to report the total payments made to each contractor for services provided that are performed on, or in relation to, any part of the industries listed above.

If a payment is for both labour and materials, you are required to report the whole amount.

Payments you do not report

Do not report the following:

• Payments for materials only or where labour is incidental to supply of materials.
• Any invoices that you have received but not paid as at 30 June each year.
• Payment which are reported through PAYG withholding annual report or single touch payroll.
• Payments for private and domestic projects.

Aspen Corporate can help you

Following the recent public announcements by The ATO about their intent to actively monitoring and following up on TPAR obligations, we strongly advise ensuring your TPAR is lodged by the due date of 28 August.

If you are unsure whether you have TPAR requirements, or for help with completing and lodging your TPAR, contact your Aspen Corp Advisor today.