Disclose Contractor Payments by 28 August, ATO Warns
Small businesses told under-reporting will be exposed by powerful data matching.
The ATO is warning businesses that they have until 28 August to complete a taxable payment annual report (TPAR) for last year as it cracks down on the shadow economy.
Around $350 billion in payments made to 950,000 contractors were reported last year and the ATO expects more than 270,000 businesses to complete a TPAR this year.
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.
The reminder is part of the ATO’s focus on off-the-books payments to contractors and Assistant Commissioner Peter Holt said it was trying to keep things equitable for businesses that follow the rules.
“The TPAR is just one tool in the ATO’s toolbelt, helping crack down on $11 billion a year in missing taxes and keeping things fair for those businesses and contractors doing the right thing,” said Mr Holt.
“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.
“Trying to ‘help out’ your contractors by not disclosing their payments is a great way of bringing attention on yourself.”
The ATO introduced TPAR in 2012 and said it used the information to make sure businesses were complying with their tax obligations, such as using a valid ABN and reporting the correct amount of income when lodging business activity statements.
Mr Holt said that the ATO’s new system could make it easier for businesses and their tax agents to meet their tax requirements.
“We know most small businesses do the right thing, however there are some contractors out there who deliberately don’t report or under-report their income, making it unfair for honest businesses,” said Mr Holt.
“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.
“Our new reported transaction services can help businesses and their tax professionals to view their data to make it easier to meet tax obligations.
“If you’re a sole trader, any payments you received as a contractor that were reported in a TPAR will be available as a pre-fill information report into your tax return.
“Whether you lodge your tax return yourself or through an agent, just remember to double check the pre-fill information is complete and correct before lodging, especially as not all your income may have been reported to us previously.”
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