The ATO warned businesses that have not yet lodged that they need to lodge as soon as possible to avoid penalties, as forms were due to be lodged by 28 August 2020 and are now well overdue.
The TPRS is a black economy measure designed to assist the ATO identify contractors who don’t report or under-report their income.
According to ATO assistant commissioner Peter Holt, some businesses may not realise they need to lodge a taxable payments annual report (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. These businesses may not have previously needed to lodge a TPAR. However, if the total payments received for these deliveries or courier services are 10 per cent or more of the total annual business income, you’ll need to lodge,” Mr Holt said.
“We have welcomed the collaborative way the building and construction industry has continued to work with the ATO to ensure the success of the TPRS, through regular engagement with head contractors across the industry.”
The ATO said around 280,000 businesses need to lodge a taxable payments annual report (TPAR) for 2019–20.
Mr Holt noted estimates from the Black Economy Taskforce that the black economy is costing the community as much as $50 billion, which is approximately 3 per cent of the gross domestic product (GDP).
Mr Holt also clarified that it’s not just businesses that pay contractors in the building and construction industry that need to lodge a TPAR, and that 2020 was the first year that businesses that pay contractors to provide road freight, information technology, security, investigation or surveillance services may need to lodge a TPAR with the ATO.
Further, Mr Holt said this is in addition to those 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. I like to think of the TPRS as a bit of a spirit level for tax obligations,” he said.
“Our role is to make sure the ‘bubble’ is centred as much as possible to keep things on the level and fair for everyone.”