- November 21, 2017
- Posted by: Keshab Sapkota
- Category: Accounting, Business Advisory, Small Business, Taxation
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If you are running a contractor-based cleaning and courier business, you will be required to report all of your contractor’s payments to ATO, starting from 1 July 2018. This is known as Taxable Payments Reporting System (TPRS) which requires every business to report payments made to each separate contractors throughout the year strengthening ATO’s ability to use data matching to track payments being received by contractors in the industry.
Previously, this was only required for business on building and construction industry. Like reporting wages paid to employees to ATO, failure to lodge the annual taxable payments report (a summary form of all payments made to contractors) on time will only leave you with nasty penalties.
The small business who are in cleaning and courier business must get themselves into habits of keeping proper records of all contractors. This includes the ABN of the contractor, business name, address, contact number, total payments made and whether GST is included. These details should usually be on their invoices already however we advise such business owner’s to be prudent to check the details as it only waste your time chasing for it later.
We believe, due to high volume/turnover of contractors, it is going to significantly increase the compliance cost for the business. Keeping proper records of all contractors will make it easier for small business.
For further information about Taxable Payments Annual Report, please speak to one of our accountants on 03 9863 6795 or visit ATO’s website on https://www.ato.gov.au/business/reports-and-returns/taxable-payments-annual-report/businesses-in-building-and-construction/lodging-your-taxable-payments-annual-report/.