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 aim of the system is to improve compliance with tax obligations by those contractors who are currently not doing the right thing.
From 1 July 2012, businesses in the building and construction industry need to report the total payments they make to each contractor for building and construction services each year. You need to report these payments on the Taxable payments annual report. The information reported about payments made to contractors will be used for the ATO’s data-matching program to detect contractors who have not lodged tax returns and have not included all their income in returns that have been lodged.
Businesses in the building and construction industry will need to report if all of the following apply:
- you are a business that is primarily in the building and construction industry
- you make payments to contractors for building and construction services
- you have an Australian business number (ABN).
You are considered to be a business that is primarily in the building and construction industry if any of the following apply:
- in the current financial year, 50% or more of your business activity relates to building and construction services
- in the current financial year, 50% or more of your business income is derived from providing building and construction services
- in the financial year immediately before the current financial year, 50% or more of your business income was derived from providing building and construction services.
If you are located on the Gold Coast or surrounding areas Contact Us at Solve Business Accountants if you need help with your construction business tax.
