Payments you don't report
Payments for materials only
You're not required to report on payments if the invoices are for materials only, such as building supplies and materials.
Unpaid invoices as at 30 June each year
Don't report any unpaid invoices as at 30 June each year – for example, if you receive an invoice in June 2014, but you do not pay that invoice until sometime in July 2014, you report that payment in the 2014–15 Taxable payments annual report.
Pay as you go withholding payments
You don't report payments that are required to be reported in a PAYG withholding annual report – for example, payments to:
- workers engaged under a voluntary agreement to withhold
- workers engaged under a labour-hire or on-hire arrangement
- contractors who do not quote an ABN.
If amounts are withheld because a contractor didn't quote an ABN, you can report the details in the Taxable payments annual report instead of the PAYG withholding where ABN not quoted annual report.
If an ABN isn't provided, you must withhold under the existing pay as you go withholding arrangements.
Payments for private and domestic projects
You don't need to report if you are a:
- homeowner making payments to contractors for building and construction services – for example, if you are building or renovating your own home
- business in the building and construction industry and you make payments to contractors for building and construction services for private purposes – for example, if you are building or renovating your own home. These payments cannot be claimed as tax deductions.
Example 11a: Homeowner paying for building and construction services
Kristyn, who has an ABN for the purposes of running a bookkeeping business, manages the construction of her new home and makes payments directly to the contractors. Kristyn won't be required to report payments she makes to contractors because she is undertaking the activity in a domestic capacity, not as a business.
Example 11b: John is a builder and runs SF Builders as a sole trader. He is currently doing renovations on his own house and has engaged ML Carpets to handle the removal of old and installation of the new carpet. As this renovation is private and not part of John’s or SF Builders’ business, the payments he makes to ML Carpets is not reportable. John or SF Builders is not able to claim tax deductions for these payments.
End of example
If the work is in relation to carrying on a business, then the amounts paid to the contractors in relation to this work are required to be reported. The payments that are reportable are those made as part of the business and for which the business can claim a tax deduction (ie payments to contractors).
Example 11c: Business paying for building and construction services
Bob and Stuart are partners in BH & SM Properties. Bob also owns and runs BH Fencing as a sole trader. BH & SM is building several investment properties and has engaged BH Fencing to install fences around the properties. Since this is a business to business transaction, the payments that BH & SM Properties make to BH Fencing for installation services, is reportable.
End of example
Payments within consolidated groups
If you're in a consolidated group or multiple entry consolidated group for income tax purposes, you don't need to report payments you make to another member of that same consolidated or multiple entry consolidated group. This is because members of a consolidated group or multiple entry consolidated group are effectively taxed as a single entity.
Example 12: Payments within consolidated groups
Brick Co and Paint Co are both members of the same consolidated group for income tax purposes. Brick Co provides building services and makes a payment to Paint Co for painting its building project. Because Paint Co and Brick Co are in the same consolidated group, Brick Co won't have to report on the payment made to Paint Co for the provision of painting services. However, it will have to report on payments made to entities outside the consolidated group for the supply of building and construction services.
End of example