Taxable Payments Reporting System aims to tackle the black economy
With the federal government’s campaign against the ‘black economy’ reaching the road freight industry, the Australian Taxation Office (ATO) is offering tips for businesses using contractors as part of an awareness campaign.
Taxable Payments Reporting System (TPRS) became part of the trucking landscape on July 1, following work undertaken by the Black Economy Taskforce.
“The TPRS is a black economy measure – designed to detect contractors who don’t report or under-report their income, and protect the majority of people who do the right thing,” the ATO states.
The move relates to industry companies that hold an Australian Business Number (ABN) and pay contractors to provide road freight services on the business’s behalf.
Even if it is only part of the services they provide, they will need to complete a Taxable Payments Annual Report (TPAR).
These businesses need to report the total payments – including cash payments – they make to each contractor for providing road freight services on their behalf in the 2019-20 financial year by August 28, 2020.
They are advised to check now that they are keeping the right records to be able to report when the time comes.
Read how the ATO alerted industry to action against the black economy, here
ATO assistant commissioner Peter Holt has five handy tips for road freight businesses to help make completing the TPAR quick, easy and secure.
- make sure you’re keeping the right records for each contractor – their name, address, ABN, and the total amount you paid them, including any GST. Keeping good records makes it easy and quick to complete the TPAR every year
- if you use business software, check if it’s TPAR-ready. Talk to your software provider if you are unsure. If you don’t have TPAR-ready business software, visit ato.gov.au/TPAR for a simple worksheet that can help you to record the information
- if your business provides a range of services, not just road freight – known as ‘mixed services’ – you may need to report if payments you received for road freight and courier services make up 10 per cent or more of your total GST turnover, even if your business isn’t registered for GST
- visit ato.gov.au/TPAR – it has comprehensive information to help you work out if you need to report, how to keep records of contractor payments, and what details you need to report
- find helpful resources like a sample TPAR, a worksheet to record payments, case studies, fact sheets, videos, and information in other languages.
“If you’re not sure whether you need to complete a TPAR or if you have questions, follow our three-step guide at ato.gov.au/TPAR or talk to your registered tax professional,” Holt says.
The ato.gov.au/TPAR page can be found here.