Contractors need to disclose all income

Contractors need to disclose all income

It’s no secret that the Perth building industry is booming, which means contractors need to disclose all of their income. If you are a contractor in;

  • Building and Construction
  • Road Freight
  • Information and Technology
  • Cleaning Services
  • Security
  • Investigation or Surveillance

Taxable Payments Annual Report

You will need to be diligent in disclosing your income. It is a requirement of entities within these industries to lodge a taxable payments annual report (TPAR) with the ATO to identify their contractors and how much they were paid. 

As a result of the TPAR, the ATO will be able to identify any contractors that have not accurately reported their income. They will also be able to determine any contractors that have not lodge tax returns, activity statements, registered for GST or have quoted the wrong ABN on their invoices.

Entities were required to file the last report for the 2020 financial year on August 8th 2020. If you received any income during that year it should have been disclosed in full on your tax return and in some cases your BAS. You may receive a letter from the ATO asking you to explain the undeclared income, if you have not done the above.

If you are a contractor…

Finally, if you are a contractor, you need to ensure you have lodged your tax return and your activity statements are up to date to avoid penalties from the ATO. Remember to;

  • Include all income in your tax return
  • Quote the correct ABN on your invoices
  • Contact the tax office to voluntarily disclose any mistakes you think may have been made on a previous tax return
  • Keep up to date records of income and potential deductions

If you are a Perth Contractor that needs tax advice, contact Aspect Accountants and Advisors for an obligation free meeting.

Ph: 9227 9400