As part of the 2011/12 Federal Budget, the government announced changes to reporting for businesses in the building and construction industry.
The changes are intended to catch contractors who are not currently declaring all of their income to the ATO.
The new reporting requirements apply from 1 July 2012 and apply to businesses who operate primarily in the building and construction industry and make payments to contractors for building and construction services.
You are considered to be a business that is primarily in the building and construction industry if any of the following apply:
Businesses that are deemed to operate primarily in the building and construction industry must lodge a “Taxable Payments Annual Report” with the ATO by the 21st July 2013 (or 28th July 2013 if they lodge quarterly activity statements).
The information that is required to be disclosed in relation to payments made to subcontractors during the financial year in the Taxable Payment Annual Report is as follows:
We note that you do not need to report payments for materials only and you only need to report payments that have been physically paid before 30 June.
You will be able to lodge the Taxable Payments Annual Report using one of the following methods:
In most cases your bookkeeping software should be able to support the new Taxable Payments Annual Report in their products for the 2012/13 financial year.
The Fact Sheets below provide more detailed information on the taxable payments reporting system, including examples of those businesses required to report, types of payments to be reported, types of payments excluded, sample of the Taxable Payments Annual Report and answers to frequently asked questions.
We recommend you become familiar with the new rules well before the first reporting deadline of 21st July 2013.
If you would like to arrange a meeting to determine how the new rules will apply specifically to your business please do not hesitate to contact our office on 9388 2532.
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