There are new rules for road freight forwarders that employ contractors, affecting reporting requirements and deductibility of payments to contractors.
New Reporting Requirements
From 1 July 2019, road freight forwarders will be required to lodge a taxable payments annual report (TPAR) disclosing all payments made to contractors. This includes any payments made to contactors for road freight services they provide on your behalf.
At this stage, the new rules are limited only to contractors employed for road freight services and exclude sea and air freight transportation.
If your business provides a ‘mixed service’, and not just road freight services, you may need to lodge a TPAR as further discussed below.
For each contractor, you will be required to report the following information:
- Their Australian business number (ABN), where known;
- Their name and address; and
- Gross (GST-inclusive) amount paid to them for the financial year.
For the purposes of this report, contractors may include subcontractors, consultants and independent contractors operating as sole traders, companies, partnerships or trusts.
You are able to lodge the TPAR both online on the Business/Tax Agents Portal or using a paper form, which is available to order from the ATO publications office.
The first report will be due for lodgement by 28 August 2020 which covers the financial year ending 30 June 2020.
‘Mixed Service’ Providers
If you are providing services other than road freight forwarding, you will need to determine if you are required to lodge a TPAR for each financial year.
If the total payments you receive for providing road freight services are:
- 10% or more of your GST turnover – you must lodge a TPAR
- Less than 10% of your GST turnover – you don’t need to lodge a TPAR
We’re happy to help
Please contact our office if you would like to discuss these changes and how they may affect you in more detail on (02) 9020 4000.