Tax Alert: Expansion of the taxable payments reporting system

The ATO have expanded their taxable reporting system to include courier and cleaning industries (previously applied to property & construction industry only). This initiative forms part of the black economy taskforce  and we expect to see further industries impacted in the future.

What has changed? 

From 1 July 2018 (subject to the passing of legislation): Taxable payments reporting has been extended to include businesses that supply courier and cleaning services.
From 1 July 2010 (subject to the passing of legislation): Taxable reporting will be further extended to include businesses that supply road freight, security, investigation, surveillance, or IT services
What is taxable reporting?

‘Taxable reporting’ refers to the disclosure of payments made to contractors.

The ATO uses this information to identify contractors who have not:
  • lodged tax returns
  • included all their income on tax returns that have been lodged.
Contractors can include subcontractors, consultants and independent contractors. They can be operating as sole traders (individuals), companies, partnerships or trusts.

The details you need to report about each contractor includes:
  • their Australian business number (ABN), where known
  • their name and address
  • gross amount you paid to them for the financial year (including any GST).
Payments must be reported to the ATO each year using the Taxable payments annual report. Click here
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.

Determining if you need to report 

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 car, truck, station wagon, van, ute, motorcycle, motorised scooter, drones, bicycle or other non-powered means of transport, or on foot.
Courier services are usually door-to-door services that are often used for specialty deliveries or for small parcels or packages. Goods commonly transported using courier services include parcels, packages, letters, and food.
Courier services do not include:
  • passenger transport services e.g. buses and taxis
  • freight transport.
‘freight transport’ means the transportation of bulk or large quantities of items, goods or commodities via rail, sea, air, or road (usually heavy vehicle trucks or larger vehicles) from one location to another.
If you're a business that provides cleaning services, you need to report payments you make wholly or partly to contractors for cleaning services.
Cleaning services include, but are not limited to, 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)
  • 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.