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2 myob.com.au Easy guide to taxable payments for the trade industry 1
2 myob.com.au Easy guide to taxable payments for the trade industry 1
The information provided within this guide is of a general nature and is intended to be a guide only, in accordance with our Legal Disclaimer. For specific advice regarding your particular circumstances, please consult your tax agent or the Australian Taxation Office as appropriate.
Contents
What are taxable payments? 4
Who does the reporting regulation apply to? 5
Examples of taxable payments reporting 6
Occupations and work activities affected 7
When do taxable payments need to be reported? 8
What needs to be reported? 8
Preparing your books with MYOB online accounting software 9
Which accounting software is for me? 10
Looking for a bookkeeper, consultant or trainer? 12
Find us 14
Follow Us
2 myob.com.au Easy guide to taxable payments for the trade industry 3
Taxable paymentsThe ATO now requires Australian businesses in the building and construction industry to report all payments they make to contractors for building and construction services.
The aim of this new system is to improve compliance with tax obligations by those contractors who are currently not doing the right thing.
The ATO will use the information for data matching purposes to detect contractors who have not:
> Lodged tax returns
> Included all their income in tax returns that have been lodged.
2 myob.com.au Easy guide to taxable payments for the trade industry 3
Who does the reporting regulation apply to?This regulation affects any business (purchaser) that is primarily in the building and construction industry and:
> in the current financial year, more than 50% of your business income will come from providing building and construction services; or
> in at least one of the two past financial years, more than 50% of your business income was derived from providing building and construction services.
The Regulations specify the supply by defining both the purchaser (entity paying for the supply) and the goods and services being supplied.
4 myob.com.au Easy guide to taxable payments for the trade industry 5
Examples of the reporting regulation
Example 1
A builder pays an electrical business for the supply and installation of wiring in a commercial fit out that he is managing. This supply and installation is classed as a building and construction activity and considered more than incidental to the supply of goods, so the builder has to report the payment it makes to the electrical business.
Example 2
A paint store provides paint to painters as well as an in-house painting service. For a small additional service fee, the store will tint the paint to the colour the painter instructs. As the tinting service is considered merely incidental to the supply of the paint, the painter will not be required to report the payment it makes to the paint store.
4 myob.com.au Easy guide to taxable payments for the trade industry 5
Building and construction services
Architectural work (including drafting and design)
Asphalt and bitumen work
Assembly, installation or erection of pre-fabricated houses
Bricklaying
Cabinet making (including joinery and offsite fabrication for installation at a building site)
Concreting (including formwork, pouring and finishing)
Construction and sealing roads
Decorating
Electrical machinery, heavy, installation
Engineering
Excavation and grading
Fencing
Flooring (e.g. tiling, laying carpet, laying linoleum, timber flooring, floating floors, slate tiles, etc)
Glass and glazing work
Hanging or installing doors
Installation of fittings
Goods and services supplied
Installation of alarm systems (security, smoke)
Installation of hot water systems
Installation of pre-fabricated components (e.g. kitchens, bathroom components, laundry components, cupboards, etc)
Installation of septic tanks
Installation of tanks
Installation or work on devices for heating and cooling
Insulation work (walls, roofs, windows, etc)
Irrigation system construction
Pipeline construction
Project management
Roofing and guttering
Sewage or stormwater drainage system construction
Swimming pool installation
Timber work
Wallpapering
Waterproofing interior and exterior surfaces
Weatherboarding
Occupations and work activities affectedThe table below shows a list of occupations and work activities in building and construction services as recognised by the ATO.
For the full list, visit the ATO website.
6 myob.com.au Easy guide to taxable payments for the trade industry 7
When do taxable payments need to be reported? Taxable payments are due by 21 July each year.
What needs to be reported?
You are required to report actual payments made
and to include the following details:
> The contractor’s name as shown on the invoice> The contractor’s ABN> The contractor’s address (if known)> The total amount paid or credited to the contractor
over the income year> Whether any GST has been paid
> Any other information you think is relevant.
6 myob.com.au Easy guide to taxable payments for the trade industry 7
Preparing your books with MYOB online accounting softwarePreparing your books using MYOB accounting software can save you a lot time. It has all the smarts you need to complete your pay run like GST codes that you can allocate to each of your business transactions. Generate reports detailing GST related income, expenses and capital purchases to complete your BAS with ease and efficiency.
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8 myob.com.au
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Take back your time
No need to waste time keying in data or entering in receipts. MYOB Essentials links up with your bank so any payments you make and receive are transferred securely into your accounts.
Better way to pay your people
Everyone loves the sweet feeling of being paid. MYOB Essentials makes your payroll really easy in three simple steps.
Simple way to manage stock
Track what you buy and sell, know what’s in stock and what’s on order. In an instant.
Which accounting software is for me?
LEARN MORE
Easy guide to taxable payments for the trade industry 9
TRY FREE FOR 30 DAYS READY TO BUY LEARN MORE
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Have greater flexibility to determine how your quotes, invoices and purchase orders look, so you can create invoices as unique as your business.
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Looking for a bookkeeper, consultant or trainer?MYOB Certified Consultants are accredited by MYOB to provide onsite support for MYOB Products including sales, setup, implementation, training, advanced reporting, trouble shooting and bookkeeping.
Find an MYOB partner nearest to you.
Have any questions?
We’re here to help and our support team is available by calling 1300 555 111 or online.
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