As part of the 2011-12 federal budget, the government announced the introduction of Taxable Payments Reporting for businesses in the building and construction industry.
What does this mean?
As of the 1st July 2012, information will need to be reported to the ATO about payments made to contractors for building and construction services. This is to be done on an ATO form called Taxable Payments Annual Report.
Who is required to report?
You need to report if all of the following apply to you:
- you are a business that is primarily in the building and construction industry;
- you make payments to contractors for building and construction services; and
- you have an ABN
When and what do you need to report?
The Taxable payments annual report is due on the 21st July each year, meaning the first report will be due on the 21st July 2013. This means data needs to be collected from the 1st July 2012 . For each contractor, you will need to report:
- gross amount you paid for the financial year; and
- total amount of GST included in the Gross amount paid;
What payments do you need to report?
You need to report payments to contractors for building an construction services. These include the following if they relate to any part of a building, structure, works, surface or sub-surface:
|Installation||Maintenance||Management of Building Services||Modification||Organisation of Building Services|
What payments don’t you need to report on?
- Payments for Materials only;
- Unpaid Invoices at 30th June (e.g. an invoice raised on 30 June 2013 and paid on 7 July 2013 should be reported in the 2013-14 report);
- Pay As You Go withholding payments;
- workers engaged under voluntary agreement to withhold;
- workers engaged under a labour hire or non-labour hire agreement;
- contractors who do not quote an ABN;
- Payments for private and domestic projects (e.g. renovating your own home); or
- Payments within consolidated groups.
What to do next?
You will need to start reporting this on the 1st July 2012, which means you need to start looking at ways to capture this data. The ATO have included a worksheet to assist you when reporting. The ATO also offer 45 minute online webinar to assist you.
For more information, please contact Paul on 0407 352 504.