Tax Office to issue penalties for overdue TPARs from 22 March

The Tax Office will begin issuing penalties for overdue taxable payments annual reports (TPARs) from 22 March for businesses that haven’t lodged their TPAR from 2024 or previous years and that have been sent three reminder letters about their overdue TPAR.

If a business pays contractors for taxable payments reporting system (TPRS) services, it may need to lodge a TPAR by 28 August each year, the ATO said.

As part of the taxable payments reporting system, businesses must lodge a taxable payments annual report to report payments made to contractors that provide certain services.

These services include building and construction, courier, cleaning, information technology, road freight and security, investigation or surveillance.

“Last year, we issued more than 11,000 businesses with approximately $18 million in penalties,” the ATO said.

The ATO said if businesses don’t need to lodge a TPAR, they could submit a non-lodgment advice (NLA) form.

“If you no longer pay contractors, you can also use this form to indicate that you won’t need to lodge a TPAR in the future,” it said.

“TPAR data helps us identify contractors who under-report their income. This lets us level the playing field for honest businesses.”

In a recent update, the ATO said it would use TPAR data to identify contractors omitting or misreporting income in their tax returns through its data-matching programs.

"Through data matching, we are seeing some contractors incorrectly reporting or omitting contractor income."

The ATO warned contractors that where it suspects a contractor has omitted TPRS income on their tax return, it may contact them or their tax professional to request them to amend the tax return.

"[We may also] contact you or your tax professional via phone call to better understand your circumstances and potentially request you amend your tax return."