This alert is relevant for you if you are involved in the building & construction industry and have made payments to contractors during the year ended 30 June 2016.
What is a Taxable payments report?
If you operate a business in the building and construction industry, you must report the total payments you made to contractors during the year ended 30 June 2016 on a Taxable payments annual report by 29 August 2016*.
For each contractor, you must report:
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Their ABN (if known);
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Their name and address;
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The gross annual amount you paid for the financial year (GST inclusive); and
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The total GST included in the gross amount paid
What payments should be reported?
Not all payments to contractors must be reported.
The table below gives some examples of services for which payments are made, that must be included in the Taxable payments annual report.
The following types of payments to contractors need not be included in the Taxable payments annual report:
Why should you lodge a report?
Through the use of data matching, the information in contractor payment reports will enable the ATO to detect contractors who have either not lodged their tax returns or not reported all their income in their tax returns.
Furthermore, if you are operating in the building and construction industry and have not lodged such a report by 29 August 2016*, you may be subject to penalties.
How can Nexia help you?
Nexia Australia can assist you to complete and lodge your Taxable payments annual report by 29 August 2016.
PAYG Withholding Tax Reminder
If a contractor does not provide a payer with an ABN, the payer is obliged to deduct PAYG Withholding tax at the rate of 49% from the payment. The withholding tax must be reported on the next BAS and paid to the ATO upon lodgement of that BAS.
*Usually such reports must be lodged by the 28th of August each year, however since that day is a Sunday this year, the report can be lodged by Monday, 29 August 2016.
