ATO warns contractors about ‘off-the-books’ payments

As part of its ongoing campaign against the shadow economy, the Australian Taxation Office (ATO) has declared that it will notify contractors who are trying to “write off” their income, along with the companies supporting them. do so.

The ATO uses the Tax Payment Reporting System (TPRS) to monitor fraud among contractors, including contractors who use cash on hand as a way to avoid paying taxes.

The ATO says it reported about $350 billion in payments made to 950,000 contractors last fiscal year. Officials expect more than 270,000 businesses to complete their Tax Payment Annual Reports (TPARs) for the 2021 to 2022 fiscal year.

TPAR was introduced in 2012 to ensure that companies in the building and construction industry report their income and pay their fair taxes. TPRS obligations apply to companies in the building and construction industry, as well as companies that provide cleaning, courier, road transport, information technology and security, investigation, or surveillance services and have paid subcontractors in connection with these services. will be

The ATO uses the information reported in the TPAR to help companies report their income correctly, file their Business Activity Statements (BAS) and income tax returns, pay their taxes correctly and register for GST where applicable. Make sure you comply with your tax obligations. , and a valid Australian Business Number (ABN).

“TPAR is just one tool in the ATO’s toolbelt, helping to crack down on $11 billion in unpaid taxes a year and keep fairness for businesses and contractors doing the right thing,” he said. said ATO Assistant Commissioner Peter Holt.

“ATO has advanced data and analytics to identify companies that fail to submit TPARs,” added Holt. “Failure to report payments to contractors may be viewed as a red flag and will result in closer scrutiny from the ATO not only of your own work, but of that of the contractor. Trying to “help” the contractor by not disclosing payments is a great way to draw attention to yourself. “

The ATO is reminding these companies that they must submit their TPARs and set up payments to contractors by August 28. Businesses and tax professionals can view data about their businesses received by the ATO, including taxable payments reported under TPRS, as reported transactions on the ATO Online platform.

Companies and tax professionals filing on behalf of their clients can contact the ATO if they need additional time to file a TPAR.

“Our new reported transaction service will help businesses and their tax professionals view data to make it easier for them to meet their tax obligations,” Holt said, adding that sole proprietorships can join the ATO through TPRS. He added that the reported payments will be pre-populated on the tax return at the time of payment.

“For sole proprietorships, payments received as a TPAR-reported contractor are available as a pre-populated information report for tax returns,” says Holt. “Whether you are filing your tax return yourself or through an agent, remember to double-check that your pre-filled information is complete and correct before filing. income is not reported.”