The ATO’s tips to help security, investigation and surveillance businesses report their contractor payments
From 1 July 2019, the Taxable Payments Reporting System (TPRS) started for businesses providing security, investigation or surveillance services.
Businesses that provide these services will need to complete a Taxable payments annual report (TPAR) if they a) have an ABN and b) pay contractors to provide these services on the business’s behalf.
This new contractor reporting obligation is not part of any other regulatory review of the security industry.
These businesses need to report the total payments – including cash payments – they make to each contractor for security, investigation or surveillance services provided on their behalf in the 2019-20 financial year by 28 August 2020.
The TPRS is a black economy measure – designed to detect contractors who don’t report or under-report their income, and protect the majority of people who do the right thing.
The Black Economy Taskforce estimates that the black economy is costing the community as much as $50 billion, which is approximately three percent of Gross Domestic Product (GDP).
In 2015–16, the TPRS helped to protect $2.7 billion from being lost to the black economy in the building and construction industry alone, which shows how effective the TPRS is in improving tax compliance in an industry.
ATO Assistant Commissioner Peter Holt has five handy tips for security, investigation and surveillance businesses to help make completing the TPAR quick, easy and secure.
- “Make sure you’re keeping the right records for each contractor – their name, address, ABN, and the total amount you paid them, including any GST. Keeping good records makes it easy and quick to complete the TPAR every year.”
- “If you use business software, check if it’s TPAR-ready. Talk to your software provider if you are unsure. If you don’t have TPAR-ready business software, visit ato.gov.au/TPAR for a simple worksheet that can help you to record the information.”
- “If your business provides a range of services, not just security, investigation or surveillance services – known as ‘mixed services’ – you may need to report if payments you received for these services make up 10 per cent or more of your total GST turnover, even if your business isn’t registered for GST.”
- “Visit ato.gov.au/TPAR – it has comprehensive information to help you work out if you need to report, how to keep records of contractor payments, and what details you need to report.”
“You’ll also find helpful resources like a sample TPAR, a worksheet to record payments, case studies, fact sheets, videos, and information in other languages.”
- “If you’re not sure whether you need to complete a TPAR or if you have questions, follow our three-step guide at ato.gov.au/TPAR or talk to your registered tax professional.”