ATO issues warning to businesses on overdue TPARs
The Tax Office will begin applying penalties from the middle of next month where businesses have failed to lodge a Taxable Payments Annual Report (TPAR) from 2023.
The ATO has warned businesses that pay contractors to provide certain services to lodge their taxable payments annual report (TPAR) for 2023.
“From 22 March, we’ll apply penalties to businesses that haven’t lodged their TPAR from 2023 or previous years or have received three reminder letters about their overdue TPAR,” the ATO stated in an update issued today.
“Last year we issued approximately $18m in penalties to more than 11,000 businesses.”
The TPAR is used to report payments made to contractors or subcontractors during the financial year and is due on 28 August each year.
The ATO said the TPAR data helps the ATO identify contractors who don’t declare all their income so we can level the playing field for businesses who do the right thing.
“If you don’t need to lodge a TPAR, you can submit a non-lodgement (NLA) form. If you no longer pay contractors, you can also use this form to indicate that you won’t need to lodge a TPAR in the future,” it said.
The Tax Office said tax professionals should check if their business clients need to lodge TPAR for payments made to contractors providing services including building and construction, cleaning, courier and road freight, information technology (IT), security and investigation or surveillance.
The ATO said accountants can help business clients prepare for their TPAR by encouraging them to keep records of all their contractor payments.
“You can lodge the TPAR or NLA for your clients through Online services for agents, which also allows you to view your client's outstanding TPARs in the 'For action' screen, or under 'Lodgments' and confirm previous lodgments in the history section,” the ATO said in a previous update.
“It's important to lodge on time, as we use the reported information to pre-fill information for sole trader contractors to help with the preparation of their income tax returns, make the information available in the Reported transactions service in ATO online platforms and identify contractors that aren't meeting their tax obligations.”
