If your business operates primarily in the Building and Construction industry (see a list below) and makes payments to contractors, then you’re required to complete and lodge a ‘Taxable Payments Annual Report’.

BLOG - BUILDING AND CONSTRUCTION - TAXABLE PAYMENTS ANNUAL REPORT

...a report of the total payments you make to each contractor for building and construction services. You must lodge this report to the ATO every year by 28 August… so don’t delay as the deadline is fast approaching.

What to lodge

This report includes information such as:

  • Total Payments made 
  • Contractor name 
  • Address & Phone number 
  • ABN – If known 
  • GST paid 

What not to lodge

You do not need to report:

  • Payments for materials only 
  • Unpaid invoices as at 30 June 
  • Payments to employees 

Why

Using this information, the ATO will ‘data match’ the amounts you report as paid against what contractors report (in their tax returns) as received.

During this process, the ATO will also find instances of ‘sham contracting’ – where an employer attempts to disguise an employment relationship as an independent contracting arrangement, usually done to avoid the responsibility of employee entitlements like superannuation, insurance and long service leave obligations – and those not meeting the Personal Service Income rules.

How to lodge

You can lodge either

  • Online via Business Portal 
  • By mailing the paper form directly to the ATO 
To make it easier to complete the annual report, you should keep very good records of your contractors in, for example, Xero or MYOB. These videos show you how to do this in Xero and how to do this in MYOB.

Examples of building and construction services

The Building & Construction industry casts a wide net, below is "some" of work activities that satisfy the definition. If you would like the

  • architectural work (including drafting and design)
  • bricklaying 
  • cabinet making (including joinery and off-site fabrication for installation at a building site)
  • cable laying 
  • concreting (including formwork, pouring and finishing) 
  • decorating 
  • demolition 
  • earthworks 
  • electrical work (including electrical inspection) 
  • engineering 
  • fencing 
  • flooring (for example, tiling, laying carpet, laying linoleum, timber flooring, floating floors, resilient flooring, slate tiles, and similar flooring) 
  • gas plumbing 
  • glass and glazing work 
  • hanging or installing doors 
  • installation of windows 
  • land clearing 
  • landscaping construction (including paving and design) 
  • levelling sites 
  • painting (internal and external surfaces, including roofs) 
  • plastering (or other wall and ceiling construction) 
  • plumbing work (including plumbing inspection) 
  • project management 
  • rendering (or other internal or external surface finishes) 
  • retaining wall construction 
  • roofing and guttering 
  • sewage or stormwater drainage system construction 
  • surveying 
  • tiling (walls and similar structures) 
  • timber work 
  • wallpapering 
  • waterproofing interior and exterior surfaces 
  • weatherboarding 
If you need more information or help, contact the team at Rise Business Solutions.

@TomParkerCPA

I am passionate about all things small business. I do what I do to make a real difference. My goal is to break the mould of the ‘typical’ accountant and move our profession more towards one as a proactive business advisor for small business owners looking to learn, develop, and succeed in all they do.