Taxable payments annual report (TPAR) lodgements due 28 August 2023
The ATO is reminding businesses required to lodge a Taxable payments annual report (TPAR) to do so by 28 August 2023.
This deadline is crucial for businesses falling under the TPRS regime to fulfil their reporting obligations.
Entities operating within the construction, cleaning, courier, road freight, information technology, security, as well as investigation or surveillance sectors, and that have engaged contractors in these domains, are mandated to comply with TPAR requirements.
Tony Goding, ATO Assistant Commissioner, stresses the TPRS’s pivotal role in levelling the playing field by ensuring all enterprises contribute their fair share of taxes. Not reporting payments to contractors and deliberately under-reporting income raises red flags, potentially triggering closer inspections by the ATO.
The TPRS serves as an instrument in the ATO’s arsenal, helping in the discovery of unreported income. The TPAR equips the ATO with an array of data points to uncover discrepancies, such as unreported earnings, non-submission of tax returns or activity statements, unjustified GST claims or misuse of Australian Business Numbers.
Recent ATO actions serve as a reminder of compliance expectations. Over 16,000 penalties were issued to businesses failing to lodge TPARs for prior years. With an average fine of around $1,110, these underscore the growing difficulty of evading ATO scrutiny, especially when utilising cash transactions to evade tax.
A recent example exemplifies the efficacy of the TPAR data. An investigation into a cleaning company unveiled a mismatch between declared income and actual earnings. Despite reporting $6,892 in income, the cleaning service provider was found to have received over $80,000 from multiple companies. An audit confirmed the non-submission of activity statements and concealed payments. This resulted in adjustments to the tax return and the imposition of penalties.