The Australian Taxation Office (ATO) has reported that more than 60,000 businesses have not yet complied with the lodgment requirements under the Taxable Payments Reporting System (TPRS) for 2019-20.
The TPRS is an ATO measure designed to help them identify who don’t report, or under-report their income, and is one of the key measures in its battle against the “black economy” that it estimates costs the country as much as $50 billion a year, wich equates to approximately three per cent of Gross Domestic Product (GDP).
ATO Assistant Commissioner Peter Holt stressed that it’s not just businesses that pay contractors in the building and construction industry that need to lodge a TPAR. As of 2020 It also covers businesses that pay contractors to provide road freight, information technology, security, investigation and surveillance services, alongside businesses providing building and construction, cleaning, or courier services.
“As any good tradie will tell you, the spirit level is a critical tool to ensure construction work is being done on the level,” Holt said. “I like to think of the TPRS as a bit of a spirit level for tax obligations. Our role is to make sure the ‘bubble’ is centred as much as possible to keep things on the level and fair for everyone.”
Businesses who have not yet lodged need to do so as soon as possible in order to avoid penalties, as forms were due to be lodged by 28 August 2020 and are now well overdue. Holt added that some businesses may not realise they need to lodge a TPAR but may be required to, depending on the percentage of payments received for deliveries or courier services.
“Many restaurants, cafés, grocery stores, pharmacies and retailers have started paying contractors to deliver their goods to their customers,” Holt said. “These businesses may not have previously needed to lodge a TPAR. However, if the total payments received for these deliveries or courier services are ten per cent or more of the total annual business income, you’ll need to lodge.”
Holt said that the ATO welcome the collaborative way the building and construction industry has continued to work with them to ensure the success of the TPRS, through regular engagement with head contractors.