For those of you who are in Building Services the Taxable Payments Annual Report is required to be lodged each year with the Tax Office. The report shows details of any contractors you paid during the year and includes the details of Contractor name, ABN, Address, Phone and the total Gross including GST and the GST that was paid during the year.
This report can be a difficult task if you start thinking about it at the end of year and then have to go back to July of the previous year to confirm details of contractors that have been paid and who may have moved on or changed their GST or ABN registrations. Most accounting software incorporate a means to produce this report and the required online file to be lodged. Our recommendation is to keep on top of this task as part of your procedures when you prepare your BAS. It is usually much simpler to go back 2 or 3 months to find new contractor details rather than having to find the details of someone you paid 12 months ago. The details of who needs to submit these reports and what type of contract work is included can be found at this link https://www.ato.gov.au/Business/Reports-and-returns/Taxable-payments-annual-report/ The Tax Office imposes penalties for late or non- lodgement of this report and we have seen penalties of $900+ applied.
This is further incentive to keep on top of the information needed for this report during the year so at year end it doesn’t become a complicated task. There is also a good website for checking the ABN supplied by the contractor called ABN lookup. A link to this website is below https://abr.business.gov.au/ On ABN lookup you can check the ABN that you have been given by your contractor to see if it is a valid ABN. You can also see details of the status of GST registration. So if a contractor has given you a tax invoice showing GST but is not registered for GST you need to discuss this with them.
The Tax Office does not take the receipt of a tax invoice showing GST as being all that is needed for your business to claim the GST Credit. So it is recommended that new contractors that you pay should be checked out before you make payments or process the transactions and claim the GST credit.
This article appeared in the October 2017 newsletter