Taxable Payments reporting - Building and Construction Industry ...

As part of the 2011/12 Federal Budget, the Australian government announced the introduction of taxable payments reporting which are specific to businesses in the building and construction industry.

With this new reporting measure the ATO intends to catch contractors who are not currently declaring all of their income.

The reporting comprises of reporting on an annual basis, all the payments made by businesses operating within the building and construction industry to contractors from 1 July 2012.

You are considered to be a business that is primarily in the building and construction industry if any of the following apply:

• In the current financial year, 50% or more of your business income is derived from providing building and? construction services;
• In the current financial year, 50% or more of your business activity relates to building and construction services;
• In the financial year immediately before the current financial year 50% or more of your business income was derived from providing building and construction services.

Businesses that are deemed to operate primarily in the building and construction industry must? lodge a ?Taxable Payments Annual Report? with the ATO by the 21st July 2013 (or 28th July 2013 if they lodge quarterly activity statements).

Please note that Building and construction services include any of the activities listed below if they are performed on, or in relation to, any part of a building, structure, works, surface or sub-surface:

• Alteration
• Assembly
• Construction
• Demolition
• Design
• Destruction
• Dismantling
• Erection
• Excavation
• Finishing
• Improvement
• Installation
• Maintenance
• Management of building and construction services
• Modification
• Organisation of building and construction ???? services
• Removal
• Repair
• Site preparation
• Also refer to full list of services below

The information that is required to be disclosed in relation to payments made to subcontractors during the financial year in the Taxable Payment Annual Report is as follows:

• ABN, name and address
• Gross amount paid during the financial year (inclusive of GST), but excluding payable amounts not paid before 30 June.
• The total GST included in the gross amount you paid

Please note that invoices from contractors for materials only, or minor labor included on the same invoice as material supplied, should not be included in the reporting.

You will be able to lodge the Taxable Payments Annual Report using one of the following methods:

• From 1 July 2013, online using the Business Portal, Tax Agent Portal through us as your Tax Agents or Standard Business Reporting (SBR)
• Completing a paper Taxable Payments Annual Report (NAT 74109) which can be obtained from the ATO by ordering online

Most accounting software should be able to support the new Taxable Payments Annual Report in their products for the 2012/13 financial year.

The Links below provide more detailed information on the taxable payments reporting system, including examples of those businesses required to report, types of payments to be reported, types of payments excluded, sample of the Taxable Payments Annual Report and answers to frequently asked questions.

Overview of Taxable payments reporting

Full list of examples of Building and Construction Services

Examples of Buildings, Structures, Works, Surfaces and Sub-surfaces

Sample Taxable Payments Annual Report

We recommend you become familiar with the new rules well before the first reporting deadline of 21st July 2013.

If you would like to arrange a meeting or discuss with us to determine how the new rules will apply specifically to your business please do not hesitate to contact our office on?(07) 3863 9444

Source: http://www.dlapartners.com.au/dla-speaks/building-and-construction-industry-taxable-payments-reporting/

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