From the 1st July 2012 the government requires that all business in the building and construction industry report the payments they make to each contractor for building and construction services.
The ATO will use this information as a cross matching services to ensure all contractors have lodged a tax return and included all their income on these returns.
What does this mean? It means than any one in the building industry, including plumbers and electricians, will need to report to the ATO payments made to any contractors for work completed.
The ATO has started sending business in this industry a letter outlining the reporting requirements and a form to be completed.
On the form you will need to provide your details and the contractors details including ABN, name, address, gross amount paid (only include amounts actually paid not any amounts still owing) and the GST.
Some accounting programs will have a function that will allow you to create a report that we can lodge electronically to the ATO.
If you are using an accounting program, like QuickBooks or MYOB, make sure you have all the supplier information filled out for your contractors.
The report is due for lodgment by the 28th July 2013 and will be a yearly requirement.
If you would like any further information or help completing the report please contact us at GMG.