Plus 1 Clients & TPAR (Taxable Payments Annual Report)

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Plus 1 Clients & TPAR (Taxable Payments Annual Report)

TPAR is an industry-specific reporting requirement for businesses who pay contractors for relevant services. Essentially, if you pay contractors, you need to report how much you’ve paid, and to whom. This is a relatively new requirement for businesses, but it relates to the increasing practice of businesses using contractors rather than employing full-time staff. It is required to be lodged every year by the 28th of August.

Which industries need to submit a TPAR?

Not every business needs to complete a TPAR each year, as it’s an industry-specific requirement. The types of businesses required to submit a TPAR include:

  • Courier services
  • Road freight services
  • Building and construction
  • IT services
  • Cleaning
  • Security, investigation and surveillance services

What are TPAR’s used for?

The ATO needs this information to assist with their data matching processes. When you report the payments you’ve made to contractors, the ATO can then check to ensure the contractor has declared the income on their tax return. It’s important because it helps the ATO find out if contractors are declaring all of their income, failing to lodge tax returns or quoting inaccurate ABN’s. They can also determine whether contractors should be registered for GST, if they’re not already.

What details need to be included in a TPAR report?

When getting your TPAR reporting ready, it’s important you have all the relevant details required by the ATO. Most of these details should appear on the tax invoice your contractor provides.

  • ABN
  • Name
  • Address
  • Total amount paid
  • GST paid (if applicable)

If your contractor doesn’t provide you with this information, you’re entitled to ask for a proper tax invoice that includes all of the necessary details.

Especially for 2023, we’ve seen an increase in the amount of work required to collate appropriate information for lodgement to the ATO. This has added to the time and cost required to meet compliance requirements. At Plus 1 we have created email instructions for Xero, Reckon & MYOB to guide you in organising the required data more effectively. If you haven’t already received this email please reach out to your accountant.

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