Are you in building or construction? You may want to read this
As the end of the financial year looms, a new reporting system will become applicable to the Building & Construction Industry as of 1st July 2012. Are you up to date with the changes you should be aware of to ensure you comply with your obligations? The ATO advise that most services in the building and construction industry are likely to be caught by this new regime including architectural services, bricklaying, earthworks, engineering services, plumbing services, demolition, construction management, maintenance services, cabinet making, electrical work, surveying, tiling.
In the 2011-12 Federal Budget, the government announced the introduction of taxable payments reporting for businesses in the building and constructions industry. The new system sets out to address a perception that a high level of non-compliance exists within the building industry amongst contractors and the possible non-disclosure of cash income payments.
Businesses who make payments to contractors for their services, will now be obliged to report to the ATO annually, due 21 days from the end of the financial year. These contractors should have an Australian Business Number (ABN) and as part of the report you will also be required to keep record and report their full name, address, the gross amount you paid to the contractor throughout a given financial year and the total GST included in the total payment.
The ATO will use the information provided by businesses employing contractors to detect contractors who have not lodged tax returns and who have not included all of their income on tax returns that have been lodged.
For full details about the new reporting system, the ATO has released this fact sheet.
Should you have any queries about your obligations regarding the use of contractors in your business, contact us for practical and commercially savvy advice.Back