Important news for business in the building industry

 

The ATO is constantly trying to find ways to cut out tax evasion through the cash economy, and now it has revealed perhaps its greatest weapon yet. “Taxable payments reporting”. The question you need to ask yourself is simple. Am I in the building and construction services industry? Do you have an ABN and provide building and construction services? Don’t stop reading this just if you aren’t a builder. Industries which fall into this category even include:

·         Architectural work (including drafting and design)

·         Cable laying

·         Communications construction

·         Decorating (can you believe that!?)

·         Drainage work

·         Earthworks

·         Engineering

·         Alarm installation

·         Solar installation]

·         Internet infrastructure construction

·         Land clearing

·         Surveying

These are just a few more obscure types to help you understand the broad spectrum of business that this new reporting requirement will affect. Obviously, any builders, painters, plumbers, electricians etc. will fall into this also.

So what does it mean? And more importantly what do you need to do?

Basically, you will need to report the following information on the “Taxable Payments Annual Report”, by 21 July 2013 (for the June 2013 tax year). These are for payments made to labourers, and in some cases labour work and materials.

·         ABN

·         Name

·         Address

·         Gross payments for the year including GST

·         Total GST included in the gross

Note that you do not need to report payment for materials alone. You only need to report payments for supply of labour and materials, or just labour by itself.

This process can become difficult if you are not either using a great bookkeeper (Linkbookkeeping is a great choice!) or keep excellent records of all your payments to your contractors. Using software like MYOB, XERO, or Banklink are a great way to help make this reporting requirement a lot easier. If you don’t use a software package, you’re going to need to record this information manually. The tax office has developed a worksheet for this purpose, and it can be found at http://www.ato.gov.au/content/downloads/BUS00313486js23659.pdf

The Tax office has unfortunately a very severe penalty regime in place for late lodgement of forms. Currently this is at $110 per month. If you are not organised it will most likely be a significant (and unnecessary) blow to your business.

It’s also a good idea to check out http://www.ato.gov.au/content/00313486.htm which will give you the ATO rundown of the legislation.

At Link Bookkeeping, we are ready to handle issues like this from the ATO, so feel free to contact us if you need any help with this.

Also, if you're ever looking to sell your home why not sell with the best real estate agents Brisbane Brisbane RE

-James Webb