Should you lodge a TPAR for your business?

The Taxable Payments Annual Report (TPAR) is an industry-specific report through which businesses inform the ATO of the total payments made to contractors for services in that financial year. This information is then used by the ATO to match the contractors’ income declarations to improve their compliance efforts.

A TPAR is generally required by businesses that have an Australian Business Number (ABN), have supplied a relevant service and have made payments to contractors for services completed on your behalf. Contractors can be operating as sole traders, partnerships, companies or trusts. The following services are considered relevant:

• Building and construction services
• Courier or Road freight services
• Cleaning services
• Information Technology services
• Investigation or surveillance services

If your business provides these services, regardless of whether it is only a part of the services you offer, or if it is a federal, state, territory or local government entity, you are obligated to report the payments made to third parties through a TPAR.

It is important to remember that not all payments need to be reported. Your taxable payments annual report does not require details of:

• Payments for exclusively materials
• PAYG withholding payments
• Contractors who do not provide an ABN
• Incidental labour costs
• Invoices that are unpaid as of 30 June
• Payments within consolidated groups
• Payments for private and domestic projects.

Only payments made to contractors for work that is relevant to carrying on your business needs to be reported. Your TPAR is due by 28 August each year, and fines may apply for not lodging the report by the specified deadline.

If your business does not need to lodge a TPAR for a particular financial year, consider submitting an optional non-lodgement advice through the ATO business portal to avoid unnecessary follow-up about TPAR lodgements.