On Wed 31.10.2018, the ATO released Law Companion Ruling LCR 2018/8 on the recently enacted measure to extend the third party reporting regime to entities in the cleaning and courier industries. The law was amended under the Treasury Laws Amendment (Black Economy Taskforce Measures No. 1) Bill 2018, which became law on 3 October 2018.
ABN holders who supply courier or cleaning services are required to advise the ATO of any payments (or other consideration) they make to contractors, on or after 1 July 2018, where such consideration is wholly or partly for providing a service on their behalf. This means that courier and cleaning service providers would need to lodge their first annual report (the Taxable payments annual report) by 31 July 2019. This is the equivalent of the returns all employers lodge, each year, with the ATO, about payments they have made to their employees.
Ruling LCR 2018/8 discusses the meaning of courier and cleaning services, payments that need to be reported and those that do not, and the reporting exemption that applies if the total amount received for courier or cleaning services is less than 10% of the entity’s GST turnover as at 30 June.
DATE OF EFFECT: 1 July 2018.
FJM 18.11.18
[ATO website: LCR 2018/8; Tax Technical: Related Article; LTN 210, 31/10/18; Tax Month – November 2018]
CPD questions (answers available)
- Do all companies that have to report payments to contractors (as all employers have to report payments to employees)?
- What is the percentage of turnover, that comes from cleaning or courier services, beneath which reporting is not required?
- When was the amending Act passed into law?
- When when to relevant service providers have to first do something?
- What do they have to do?
- In what sense is the 1 July 2018 relevant?
