Dandenong Accounting for building and construction industry

Dandenong Accounting for building and construction industry

1 Oct, 2015

Building and construction industry is extremely dynamic challenging type of industry. A successful building and construction businesses relies on professional accountants/advisers to provide guidance, analytical thinking and foresight. At Lotus Smart we understand the challenges faced by construction business which includes dealing with the complex tax and GST laws, new tax payment reporting system and cash flow management. We have assisted many businesses in construction industry to really nail there plans.

As part of the 2011-12 Federal Budget, the Government announced the introduction of taxable payments reporting for businesses in the building and construction industry. Taxable payment reporting system is applicable to those primarily in the building and construction industry and which makes payments to contractors for building and construction services. The aim of the new system is to improve compliance with tax obligations by those contractors who are currently not doing the right thing.

The information reported about payments made to contractors will be used by ATO for data matching to detect contractors who have defaulted with their tax obligation. For instance, those who have not:

  • Lodged their tax returns
  • Included all their income on tax returns that have been lodged.
  • Registered for the GST even though they are required to do so.

What details need to be reported?

For each contractor, the following details need to be reported each financial year:

  • Australian Business Number (ABN)
  • Address
  • Gross amount paid to the contractor for the financial year (this is the total amount paid inclusive of GST)

What need not be reported?

  • Invoices are for materials only, such as building supplies and materials.
  • Unpaid invoices as at 30 June each year as the system follows the cash basis.
  • Payment reported under PAYG withholding annual report. If amounts are withheld because a contractor did not quote an ABN, then such detail can be reported in the new taxable payments annual report instead of the PAYG withholding report.
  • Payments for private and domestic projects.

When do you need to report to ATO?

Taxable payments annual report is due 21 July each year.The first Taxable payments annual report for 2014-15is due on 21 July 2015. For those lodging activity statements quarterly, they can lodge it by 28 July 2015.

How we can assist you with the new reporting obligation?

When you need a Dandenong Accounting firm for theĀ building and construction industry, contact our team. We can also help you to put a system in place whereby your accounting software/processes update the report as and when you make a payment to the contractors so that the year end reporting obligation can be met without much of a hassle.

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