We recently received the below question from a subscriber of LookUpStrata, Australia's top property blog on strata living. We thought it worth sharing also here:
We employ several Contractors, both part time permanently, and of course odd job Tradies etc. Some charge GST others are not registered. Should we do an annual TPAR?
The short answer here is thankfully, 'No'... well, at least at the time of writing (March 2023).
The Taxable Payments Annual Report (TPAR) is a form that reports payments made by an entity to contractors and subcontractors during the preceding financial year. It is a compliance obligation on entities that operate in certain industry sectors and needs to be lodged with the Australian Taxation Office (ATO) before 28 August each year.
The ATO's reasoning for the introduction of the TPAR back in 2012 was to better ensure that contractors operating in sectors deemed to be prone to 'cashies' were declaring all of their income and paying their fair share of tax. By having payers list the ABN and contact details of each contractor on their TPAR form, the ATO were looking to create a mechanism by which they could compare the figures of a contractor's tax return with the totals reported against their ABN in the various TPARs of their customers. The first low hanging fruit at inception was the construction industry... and several others have been added since including cleaners, couriers and IT services.
It's important to note that it's the industry or sector that the payer operates in that determines whether they need to prepare a TPAR. If an entity happens to pay a construction contractor but collects the majority of their income from services or goods totally unrelated to any TPAR industry, then there is no need to lodge a TPAR.
The service supplied by a strata company (aka Owners Corporation, Community Title Scheme etc) is the maintenance of the common property of the strata scheme.. which does not currently fall under the ATO's list of TPAR applicable industries as at the date of writing this article (March 2023). Naturally though, additional industries will be added over time and with the prevelance of contractors engaged by strata companies, don't be surprised if one day, this situation changes. For now though - we're safe.
Quick Takes:
- Strata companies do not need to prepare an annual TPAR as they are not currently (March 2023) in one of the ATO's TPAR categories.
- The situation may change in the future if and when the ATO adds strata as a TPAR industry.
For more information, please contact the Ascend office via your strata manager.
Links:
- ATO Website - Taxable Payments Annual Reports
The above content is of a general nature and should not be relied upon as professional advice. Ascend encourages readers to seek advice from suitably qualified professionals in relation to their specific circumstances and not to rely solely on the information provided above. Please contact our office for more information.
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