From 1 July 2018, if you are a business that provides courier or cleaning services you will need to report payments you make to contractors if:
- the payments are for courier or cleaning services
- you have an Australian business number (ABN).
Contractors can be sole traders (individuals), companies, partnerships or trusts.
Payments must be reported to the ATO each year using the Taxable payments annual report.
Businesses that are required to report will need to collect the relevant information from 1 July 2018. The first annual report will be for the 2018-19 financial year and is due by 28 August 2019.
If you’re a business that provides courier services, you need to report payments you make to contractors that are wholly or partly for courier services.
Courier services include activities where items or goods are collected from, and/or delivered to, any place in Australia using a variety of methods including by truck, car, station wagon, van, ute, motorcycle, motorised scooter, bicycle or other non-powered means of transport, or on foot.
Courier services do not include:
- passenger transport services e.g. buses and taxis, transporting of blood, blood products, organs or tissue
- freight transport.
If you’re a business that provides cleaning services, you need to report payments you make to contractors that are wholly or partly for cleaning services.
Cleaning services include any of the following activities undertaken on a building, residence, structure, place, surface, transport/vehicle, industrial machinery or equipment and for events:
- Interior cleaning
- Exterior cleaning (except sand blasting or steam cleaning)
- Carpet cleaning
- Chimney cleaning
- Gutter cleaning
- Road sweeping and street cleaning
- Swimming pool cleaning
- Park and park facilities cleaning.
‘Events’ include staging of sporting, cultural, scientific, technological, agricultural or entertainment events and exhibitions.
‘Transport/vehicles’ includes trains, trams, buses, ferries, airplanes, ships, trucks, cars and other motor vehicles.
Payments you need to report:
If your business provides cleaning services, you only need to report payments you make to contractors for cleaning activities. Similarly, if your business provides courier services, you only need to report payments you make to contractors for courier activities.
If an invoice you receive from a contractor includes both labour and materials, whether itemised or combined, you are required to report the total amount of the payment.
Details you need to report:
The details you need to report for each contractor include:
- ABN (where known)
- gross amount you paid for the financial year (this is the total amount paid including GST)
- total GST included in the gross amount you paid.
Payments you don’t need to report:
There are specific payments you don’t report on the Taxable payments annual report:
- Payments for materials only
- Unpaid invoices as at 30 June each year
- Pay as you go (PAYG) withholding payments, such as those you make to employees, as these amounts are reported in your PAYG withholding payment summary annual report
- Payments within consolidated groups – if you’re in a consolidated or multiple entry consolidated group for income tax purposes, you don’t need to report payments you make to another member of that same group. This is because members of a consolidated or multiple entry consolidated group are effectively taxed as a single entity. However, each entity in the group will need to consider if they are a business that provides courier or cleaning services, and report payments they make to contractors outside the consolidated group, for courier or cleaning services respectively. If so, they will need to lodge a report.