What is the taxable payments annual report (TPAR)?
If youre running a business, its important to be aware of all your reporting obligations. In recent years, the Australian Tax Office (ATO) has started to expect increased access to data, so you need to understand your obligations when it comes to compliance and third-party reporting. Taxable payments to contractors are one of the key reporting obligations that small to medium size businesses need to pay attention to. Find out everything you need to know about the taxable payments annual report. TPAR explained  TPAR stands for taxable payments annual report. Put simply, this is an industry-specific report for companies that need to report the total payments theyve made to contractors for services. This amount is reported to the ATO through the taxable payments annual report. The ATO will then use this information to data match the annual income declared by contractors, helping to improve compliance. For example, TPAR reports can help the ATO identify if a contractor hasnt included all their income on their tax return, failed to lodge tax returns/activity statements, quoted an incorrect ABN on their invoices, or failed to register for GST when theyre required to do so. This ensures that all contractors are meeting their tax obligations. As TPAR is an industry-specific document, not all businesses need to be concerned. If your business provides the following services, even if its only part of the services you offer, you may be required to submit a TPAR report:  Building and construction services  Road freight services  Cleaning services  Information technology (IT) services  Mixed services  Security, investigation, or surveillance services  Courier services  In addition, federal, state, territory, and local government entities are obligated to report the payments made to third parties for providing services. You may need to report your companys taxable payments. No, its important to note that not all payments need to be reported. When youre putting together your taxable payments report, you need to include all the payments you made for the financial year. You need to lodge (submit) your TPAR by 28 August each year, and penalties could be applied if you dont. There are many different TPAR lodgement methods, including lodging on paper (NAT 74109 form), lodging online, and lodging via business software. Simply choose the method that makes the most sense for your business (although be aware that government entities must complete their TPAR lodgement online). We can help  GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.