MYOB TPAR – Set Up the Taxable Payments Annual Report in Account Right

If you have a business providing services in building and construction, cleaning, courier, road freight, IT or security industries, this may apply to you. You may be wondering how to generate in MYOB a Taxable Payments Annual Report (TPAR) – and when is the due date?

Here we look at what the Australian Tax Office (ATO) requires and then the Steps to set up and generate a Taxable Payments Annual Report from MYOB software.

(i) ATO Requirements

The Taxable Payments Annual Report (TPAR) reports to the ATO about payments that are made to contractors for providing services. Some government entities also need to report the grants they have paid in a TPAR.

Contractors can include - subcontractors, consultants and independent contractors.

Contractors can be operating as sole traders (individuals), companies, partnerships or trusts.

The details you need to report about each contractor are generally found on the invoice you should have received from them. This includes:

• Their Australian business number (ABN), if known;
• Their name and address;
• Gross amount you paid to them for the financial year (including any GST).

The ATO uses this information to identify contractors who haven't met their tax obligations.

When to lodge – due 28 August annually

There are different industries that need to report, and different start dates to begin reporting.

See our post HERE, for more detail.

(ii) MYOB - The steps to set up and generate the report are -

A. How to track reportable payments in AccountRight

Once you set up MYOB, you can start marking transactions as reportable including:

• Spend Money payments made to suppliers as reportable. You can also set up a supplier so that any payments for them are automatically included in reporting;
• Bills and Orders recorded for suppliers. Payments received against these transactions will be included in the report.

You can then generate a report that will help you complete the ATO forms, or create a report file you can lodge electronically.

B. Set the reporting preference

1. Go to the Setup menu > Preferences. The Preferences window appears.
2. Click the Reports & Forms tab and select the preference, I Report Taxable Payments Made to Contractors.
3. Click OK.
   Code Transactions for TPAR – 2 ways – per specific transaction or per supplier

1. 1. Specific Transactions to report only – Each time you record a Spend Money or Purchase transaction, the Reportable Payment option will appear in the transaction window. Select this option to mark the transaction as being a reportable payment.
   2. Suppliers to report (if you need ALL their transactions marked by default as Reportable)
      1. Go to the Card File command centre and click Cards List. The Cards List window appears.
      2. Click the Supplier tab.
      3. Click the zoom arrow on the left of the card you want to set up. The Card Information window appears.
      4. Click the Buying Details tab.
      5. Select Report Taxable Payments. In the message that appears, choose whether to report any existing transactions for the supplier for the current financial year. Note that you can later remove certain  payments from reporting at year end, if some don’t apply.
      6. Click OK. The Cards List window reappears. Whenever the card is selected in a Spend Money or purchase transaction, the transaction is marked as reportable by default (can remove certain non-applicable transactions later if required).

C. To create the taxable payments report -

• Go to the Purchases command centre and click Report Taxable Payments. The Taxable Payments Assistant opens.
• Click Next. The Company Information window appears.
• Enter any company information that doesn’t appear by default.
• Click Next. The Review window appears.
  In this window, you can click Review Your Transactions to:
  Click Next. The Create window appears.
  • Review all transactions marked as reportable;
  • Change the reporting status of transactions.
• Click View Taxable Payments Report. The Taxable Payments Annual Report (Detail) report appears. You can use the report to help you complete your ATO forms, or print to keep for your records.
• If you're lodgingthe Taxable Payments Annual Report file:Click Finish to close the assistant.
  • Click Create Taxable Payments File. The Save As window appears;
  • Select the location to store the file and click Save.

D. Lodging your report electronically

You can lodge your report electronically, using the ATO’s Business Portal. If you haven’t already set up access to the Business Portal, you should do this so you’ll be able to lodge the report when it’s due.

See our article about TPAR for more information about what the ATO says.

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Business Tax Tips - TPAR – What you need to know about – Taxable Payments Annual Report form – Due 28 August Annually

If you have paid contractors and are in certain industries/services (even if only part of the services you provide) then you may need to submit the Taxable Payments Annual Report (TPAR) - here is all you need to know.

The TPAR reports to the ATO about payments that are made to contractors for providing services. Some government entities also need to report the grants they have paid in a TPAR.

Which industries – are you providing services (whole or part of your turnover, ex GST) in the following industries:

• Building (includes plumbing, architecture, electrical etc), since YE2015;
• Government entities since YE17;
• Cleaning, for YE19;
• Courier, for YE19;
• Road freight, for YE20;
• IT, for YE20;
• Security, for YE20.

Contractor types - subcontractors, consultants and independent contractors.

Contractor structures – as either sole traders (individuals), companies, partnerships or trusts.

What to report about each contractor are generally found on the invoice you should have received from them. This includes:

• Their Australian business number (ABN), if known;
• Their name and address;
• Gross amount you paid to them for the financial year (including any GST).

The ATO uses this information to identify contractors who haven't met their tax obligations.

When to lodge – due 28 August annually

There are different Industries that need to report, and different start dates to begin reporting (see list above).

Mixed service business

If your business provides one or more of the relevant services as listed above, you may need to lodge a TPAR.

Each financial year, you’ll need to work out what percentage of payments you receive/sell, are from any of the services above.

If the total payments/sales are 10% or more of your GST turnover (or if you are primarily/mostly in the listed industries above) – you must lodge a TPAR.

Even if you are not registered for GST, you’ll still need to check if you need to lodge a TPAR. All businesses have a GST turnover, regardless of whether or not they are registered for GST.

Examples of the types of mixed businesses that may need to lodge a TPAR include:

• Florists;
• Building maintenance;
• Franchisees and retailers;
• Event management.

Calculate your current or projected GST turnover

If you've been operating your business for:

• The full financial year – use your current GST turnover for the year;
• Less than 12 months of the financial year – you must use your projected GST turnover by working out what your GST turnover will be for the next full financial year.

Your GST turnover is your gross business income (not your profit) excluding any:

• GST you included in sales to your customers;
• Sales that are not for payment and are not taxable;
• Sales not connected with an enterprise you run;
• Input-taxed sales you make;
• Sales not connected with Australia.

Read more at the ATO TPAR

Nothing to Lodge?

If you are not required to lodge, you can let the ATO know, to avoid unnecessary follow up.

Go here to lodge Nil online - https://www.ato.gov.au/TPARnilreport/

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Bookkeeping – June wages are paid in July – last pay of the year, in which year is it included if pay period crosses over June-July?

Client question –

Quick question Paul. We have an employee paid fortnightly.

The next payment is to be made on 07/07. This includes the week 26/6 to 30/6. Does any of this have to be put through in EOFY?  Or will it be first payment for New Financial Year on new tax tables?

Solution –

Payroll is always recorded as a cash payment in the accounts (that is, WHEN it is paid).

Regardless of what period it covers – it is WHEN it is paid that matters. So the pay run is not included in the previous tax year but in July the next financial year.

You can finish your payroll year, prepare the STP Finalisation/Payment Summaries – check you include in Gross Payments, any NEW payroll types/categories if you created any during the year

Then roll forward to new payroll year, and you can process the 7/7 payroll that covers end of June days and some of July days.

To confirm – see the ATO discussion here, and also, you can find information about end of year payments to employees on the ATO website.

Need help? Not sure? Call for FREE 30min advice / strategy session today!

Call and you also get FREE “Avoid these GST mistakes” – There’s 18 that the Tax Office see regularly – Get them right!

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