If you run a business that makes payments to contractors, you’ll want to stay ahead of changes to the Taxable Payments Reporting System (TPRS) no matter what industry you’re in.
When you run a business, you have to keep up to date on all the latest regulations and changes in both legal and tax fields. A fine example of something business owners need to know about right now is the Taxable Payments Reporting System (TPRS). In particular, business owners must understand and adhere to the system’s corresponding Taxable Payments Annual Report (TPAR).
It means more paperwork, unfortunately, but shouldn’t take too long to complete each year once you get organised.
As part of the Taskforce’s recommendations, the Taxable Payment Reporting System, or TPRS for short, has been extended.
The plan is to reduce the incidences of people being paid as contractors illegally. It strengthens the government’s ability to match the information provided on contractors’ income tax returns to that listed on business reports.
The ATO can more easily pick up on discrepancies and detect people trying to hide income and evade tax.
Now, in addition to covering the building and construction industry, the system will also cover other sectors which the taskforce identified as being high risk for black economy activities.
These industries are information technology, cleaning, road freight, courier, security, and investigation and surveillance services.
Anyone operating a business in these areas and paying contractors must start adhering to the TPRS and compiling a TPAR each year.
There are different deadlines for each industry, so make sure you understand which one relates to your business.
Taxable payments annual reports for ventures that supply courier or cleaning services must be submitted by 28 August 2019. This covers payments made during the 2018-2019 financial year.
For businesses in IT, road freight, security or investigation or surveillance services, there is an extra year. These reports are due by 28 August 2020, and cover the 2019-2020 financial year.
If you require any assistance in relation to Taxable Payments Reporting please contact Toni Brunsgard of our office on 9387 5637.