Penalties Soon to Apply for Taxable Payments Annual Reports (TPAR)

What is a TPAR? 

TPAR is an industry-specific report that certain businesses or government entities need to lodge on an annual basis. It outlines payments made to contractors and subcontractors in specific industries such as building and construction, cleaning and courier, road freight, information technology (IT) and security services. 

If your business makes payments to contractors, you must report payments to the Australian Taxation Office (ATO) each year by the 28th August. Failing to lodge a Taxable Payments Annual Report (TPAR) could result in penalties. 

From March 22nd, the Australian Taxation Office (ATO) will enforce penalties for organisations with overdue TPAR requirements. 

Why compliance matters: 

TPARs help the ATO ensure contractors comply with tax obligations, particularly regarding the reporting of income by contractors who may not otherwise have their earnings reported. Compliance also ensures a level playing field by preventing competitors from gaining an unfair advantage through tax evasion. 

Here are some tips to help you avoid penalties: 

• Mark important deadlines: A TPAR must be lodged by the 28th of August each year. 
• Keep accurate records: Maintain organised records of payments made to contractors throughout the year including the contractor’s name, address, ABN and total amount paid for the year. 
• Review your reporting requirements: Certain services and payments are exempt from reporting. Understanding these exemptions helps ensure accurate and efficient reporting. 

If you do not need to lodge a TPAR, you will need to submit a Non-lodgement Advice Form. 

Last year, businesses faced $18 million in penalties due to late TPAR submissions. To avoid similar penalties, it’s essential to understand your TPAR requirements and take proactive steps to ensure compliance. 

If you are uncertain about your TPAR requirements or have any questions about the failure to lodge penalties, speak with your Simmons Livingstone advisor at 1800 618 800 or via email at admin@simmonslivingstone.com.au