New ATO Reporting Requirements for Subcontractors

The ATO has released guidance for businesses in the building and construction industry subject to the reporting regime commencing from 1 July 2012. From 1 July 2012, businesses in the building and construction industry need to report the total payments they make to each contractor for building and construction services each year. It says the businesses need to report payments to the ATO in a ?Taxable payments annual report?.

The ATO says the taxable payments annual report is due on 21 July each year and can be lodged in paper form or online. For the 2012-13 year, the ATO says businesses who lodge quarterly activity statements may lodge the taxable payments annual report by 28 July 2013 as it is the first year of the regime.

The annual reporting regime for payments made to contractors in the building and construction industry was first announced in the 2011-12 Budget.? According to the Government, the ATO had identified a high level of non-compliance by contractors in the industry. This includes issues with complying with GST requirements, record-keeping requirements, and the personal services income rules. Other issues include businesses engaging contractors that may actually be employees (ie ?sham contracting?), incorrect reporting of ABNs, and involvement in the ?cash economy?.

The aim of the reporting regime is to improve compliance with taxation obligations of contractors in the industry by providing the ATO with sufficient information to allow data-matching for review and targeted audits.

From 1 July 2012 businesses in the Building and Construction industry will be required to report to the ATO annually payments made to contractors.

The report must contain:

The contractor’s name;

The contractor’s ABN;

The contractor’s address (if known);

The total amount paid or credited to the contractor over the income year;

Whether any GST has been charged;  

Any other information the Commissioner may require.

We are Australian Business Consultants.For more information visit ATO Contractor Reporting or contact us  on 9597 9966.Our location is at 563 North Road Ormond Victoria 3204 Australia