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ATO shares tips for retailers reporting contractor payments

Under new Taxable Payments Reporting System.

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Since 1 July 2018, the Taxable Payments Reporting System (TPRS) applies to businesses providing courier services and from 1 July 2019 to those providing road freight services, even if it’s only part of the services they provide.

Retailers that provide courier or road freight services may need to complete a Taxable Payments Annual Report (TPAR) if they have an ABN, they pay contractors to provide courier or road freight services on the business’s behalf and payments received for courier and  road freight services make up 10 per cent or more of their total GST turnover, even if the business isn’t registered for GST.

These businesses need to report the total payments – including cash payments – they make to each contractor for providing courier or road freight services on their behalf in their TPAR, which is due by 28 August each year.

Businesses need to be checking now that they are keeping the right records so they can report when it is time. This includes checking contractors are working under a valid ABN. The TPRS is a black economy measure designed to detect contractors who don’t report or under-report their income and protect people who do the right thing.

ATO assistant commissioner, Peter Holt has five tips for retailers to help make completing the TPAR quick, easy and secure.

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  1. Keep the right records for each contractor

“This includes their name, address, ABN, and the total amount you paid them, including any GST. Keeping good records makes it easy and quick to complete the TPAR every year.”

  1. Check if your business software is TPAR-ready

“Talk to your software provider if you are unsure. If you don’t have TPAR-ready business software, visit ato.gov.au/TPAR for a simple worksheet that can help you to record the information.”

  1. “Do you provide a range of services – known as ‘mixed services’?

“If so, you may need to report if payments you received for courier and road freight services make up 10 per cent or more of your total GST turnover, even if your business isn’t registered for GST.”

  1. Visit ato.gov.au/TPAR

“It has comprehensive information to help you work out if you need to report, how to keep records of contractor payments, and what details you need to report. You’ll also find helpful resources like  a worksheet to record payments, case studies, fact sheets, videos, and information in other languages.”

  1. Not sure whether you need to complete a TPAR?

“Go to ato.gov.au/TPARmixedservices or talk to your registered tax professional, who can also lodge online on your behalf.”