As part of the 2011-12 Federal Budget, the government announced the introduction of taxable payments reporting for businesses in the building and construction industry. The ATO claim their aim is to improve compliance with tax obligations by those contractors who are currently not doing the right thing. They advise that information reported about payments made to contractors will be used for their data matching to detect contractors who have not:
- lodged tax returns
- included all their income on tax returns that have been lodged.
However, we see that this reporting as much more far reaching, and designed to open a “can of worms” particularly in detecting whether contractors should in fact be employees, and therefore receiving employee entitlements, such as super. The ATO has now written to clients who are in the building and construction industry and have made payments to contractors for building and construction services during the year ending 30 June 2013 giving a deadline of 21 July 2013 to lodge this report.
This report requests the following information about each contractor you have made payments to:
ABN, phone number, business name, or personal names, address, Tax withheld if ABN not quoted and total GST paid, and gross payments, including GST and tax withheld.
We recommend all business owners who have received this form, and anybody who employs subcontractors to sit with us to clarify if their contractors pass the personal services tests.