Bar, restaurant and café owners are all being reminded by the Australian Taxation Office (ATO) that they must comply with lodgement requirements under the Taxable Payments Reporting System (TPRS).
The TPRS is a black economy measure designed to assist the ATO identify contractors who don’t report or under-report their income. ATO Assistant Commissioner Peter Holt explained that the Black Economy Taskforce estimated that the black economy is costing the community as much as $50 billion, which is approximately three percent of Gross Domestic Product (GDP).
The ATO estimates that around 280,000 businesses need to lodge a Taxable payments annual report (TPAR) for 2019-20.
As of 2020 businesses that pay contractors to provide road freight, information technology, security, investigation, or surveillance services may need to lodge a TPAR with the ATO. This is in addition to those businesses providing building and construction, cleaning, or courier services.
“As any good tradie will tell you, the spirit level is a critical tool to ensure construction work is being done on the level. I like to think of the TPRS as a bit of a spirit level for tax obligations. Our role is to make sure the ‘bubble’ is centred as much as possible to keep things on the level and fair for everyone,” Holt said.
The TPAR for 2020 were due to be lodged by 28 August 2020 and are now well overdue, so businesses yet to lodge a TPAR need to lodge as soon as possible to avoid penalties.
Holt added that some businesses may not realise they need to lodge a TPAR but may be required to, depending on the percentage of payments received for deliveries or courier services.
“Many restaurants, cafés, grocery stores, pharmacies and retailers have started paying contractors to deliver their goods to their customers. These businesses may not have previously needed to lodge a TPAR. However, if the total payments received for these deliveries or courier services are ten per cent or more of the total annual business income, you’ll need to lodge,” Holt said.
“We have welcomed the collaborative way the building and construction industry has continued to work with the ATO to ensure the success of the TPRS, through regular engagement with head contractors across the industry,” Holt said.