As a small business owner, understanding your tax obligations can be challenging. At Cotchy, our mission is to simplify accounting and compliance for sole traders like you. That’s why we’ve put together this guide to help you determine if you need to lodge a Taxable Payments Annual Report (TPAR).
What is a TPAR, and When Do You Need to Lodge One?
Certain businesses and government entities are required to lodge a TPAR each year, reporting on payments made to contractors or subcontractors for specific services. These include:
– Building and construction
– Cleaning
– Courier and road freight
– Information technology (IT)
– Security, investigation, or surveillance
If your sole trader business provides any of these “Taxable Payment Reporting System” (TPRS) services and pays contractors to deliver them, you may need to lodge a TPAR by the August 28th deadline.
What if My Business Offers TPRS and Non-TPRS Services?
If your sole trader business provides a mix of TPRS and other unrelated services, you’ll need to calculate the percentage of your total income that comes from the TPRS activities.
What if the TPRS services are Less Than 10% of My Income?
– If TPRS services make up 10% or more of your total business income, you must lodge a TPAR.
– If TPRS services account for less than 10% of your total income, you do not need to lodge a TPAR.
3 Steps to Determine if You Need to Complete a TPAR
1. Calculate the total payments your sole trader business received from contractors for each relevant TPRS service.
2. Determine your current or projected total business income for the financial year.
3. Use the formula to calculate the percentage of your income derived from TPRS services.
Get Expert Advice from Cotchy
Unsure if your sole trader business needs to lodge a TPAR? Our team at Cotchy is here to provide expert guidance and ensure you meet all your tax obligations. Contact us today to discuss your specific situation and requirements.