Own or operate a building or construction business that pays contractors? Under new taxation legislation you’re required to submit a Taxable Payments Annual Report to the ATO in late July.
If you’ve read past the introductory paragraph, chances are you either own or manage a building or construction business. Did you know your contractor reporting obligations have changed? The ATO has made reporting changes to ensure building and construction contractors are doing the right thing.
What is a Taxable Payments Annual Report?
The Report requires you to outline the total payments your business made to contractors during the 2012-13 financial year. Most of the information you will need to submit in your Taxable Payments Annual Report is contained in your contractor’s invoices. This includes the contractor’s name, ABN, address (if known), the total amount paid or credited to the contractor over the financial year, whether any GST has been charged and any other information the Commissioner may require.
How are you recording your contractor payment information?
If you’re yet to capture contractor payments in your accounting software, and you’ve gone for the DIY option, chances are you’ve got a fair bit of homework to do.
If you’re already using up-to-date accounting software such as MYOB LiveAccounts or AccountRight, the good news is that it easily flags contractor payments, and most of the work’s been done for you. You’re one step closer to correct reporting and avoiding unwanted headaches – like having to pay a penalty for late lodgment or a non-lodgment. Businesses face enough pressure without the unnecessary stress of late or incorrect ATO paperwork.
Capturing contractor payments via up-to-date accounting software is simple and it can save you time and unnecessary hassle.
How do I find out if these changes apply to me?
You are considered to be part of the building and construction industry if:
- 50% or more of your business activities in the current financial year relates to building and construction services.
- 50% or more of your business income in the current financial year is derived from providing building and construction services.
- 50% or more of your business income immediately before the current financial year is derived from providing building and construction services.
Dates for your diary
The first Taxable Payments Annual Report for building and construction businesses is due on 21 July 2013. In this first year, if you lodge your business activity statements quarterly you may lodge by 28 July 2013.
Visit this site for a summary of major tax changes, helpful tips and resources and more.
