The taxable payments reporting system (TPRS) protected $2.7 billion from being lost to the black economy in the building and construction industry in the 2015-16 financial year.
Businesses in building and construction are required to lodge a TPRS annual report each year on any payments to contractors and subcontractors within the industry. This data allows the ATO to identify contractors who fail to lodge returns or activity statements, fail to register for GST, use false ABNs or fail to report all of their income to the ATO. Deputy Commissioner Deborah Jenkins said the TPRS is a key weapon in fighting the black economy and helps protect the integrity of the tax system.
“The significant revenue increase we’ve seen from the building and construction industry as a result of the TPRS shows how effective it is in improving tax compliance in an industry.”
“TPRS strengthens our ability to match income tax returns from contractors against what businesses report paying, allowing us to detect those trying to hide income and evade tax. The success of this system proves that if you’re trying to evade your obligations it won’t go unnoticed.”
“Businesses who are doing the right thing don’t need to worry, however if you’re not meeting your tax obligations there will be consequences.”
Following a recommendation from the Black Economy Taskforce, the TPRS has now been extended to cleaning, courier, road freight, information technology (IT), security, investigation and surveillance services. The Taskforce identified these industries as high risk for black economy activity.
Ms Jenkins said the ATO is focused on supporting businesses in these industries to meet their reporting requirements.
“For the financial year 2018-19, businesses that supply courier or cleaning services need to report payments made to contractors they use to deliver those courier or cleaning services using the Taxable payments annual report (TPAR). This will need to cover all relevant transactions from 1 July 2018 to 30 June 2019. The annual report for these businesses is due by 28 August 2019.”
“If your current record keeping isn’t accurately capturing this, I urge you to review the way you keep records or contact your professional advisor immediately to assist you.”
“If a contractor provides you with an invoice which includes labour and materials, you are required to report the total amount of the payment regardless of whether it’s itemised or combined.”
Reporting for road freight, IT, security, investigation or surveillance services will be due by 28 August 2020, covering the 2019-20 financial year.
For more information on the extension of TPRS or to access educational resources, visit ato.gov.au/TPAR.