This change to legislation impacts your business from 1st July 2012.
Depending on your business situation there are 3 possible scenarios:
1/ If you are a user of subcontractors in the building and construction industry:
From the 1st July 2012 you will have to report to the ATO all payments made by your business to subcontractors you engage to supply building and construction services to your business.
2/ If you are both a supplier of goods and services to the building and construction industry and use subcontractors as well:
From the 1st July 2012 you will have to report to the ATO all payments made by your business to subcontractors you engage to supply building and construction services to your business and as you are a subcontractor receiving payments for supplying building and construction services to the building industry your income payments will be reported to the ATO and will be matched with the income you declare on your tax returns.
3/ If you are a supplier of goods and services to the building and construction industry
If this is your situation you need do nothing, but be aware that from 1st July 2012 your income from subcontracting is going to be reported to the ATO and will be matched with the income you declare on your income tax return.
What has to be reported?
· The ABN of the contractor
· The Name and Address of the Contractor
· Gross amount paid for the financial year (including GST)
· Amount of GST included in any payments
When does this information have to be reported to the ATO?
The taxable payments annual report is due for lodgement with the ATO by the 21st July each year.
What are included as building and construction services?
Building and construction services include any of the activities listed below if they are performed on, or in relation to, any part of a building, structure, works, surface or sub-surface:
Management of building and construction services
Organisation of building and construction services
What you do not need to report?
· Payments for materials only. You are not required to report on payments where the invoices are for materials only, such as building supplies and materials.
· Unpaid invoices as at 30 June each year. Do not report any unpaid invoices as at 30 June each year. For example, if you receive an invoice in June 2012, but you do not pay that invoice until some time in July 2012, you report that payment in the 2013-14 Annual Report.