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  • Road freight services

    If you're running a business providing road freight services (even if it's only part of the services you provide), you must lodge a Taxable payments annual report (TPAR) for each financial year that you:

    • have an Australian business number (ABN), and
    • make any payments to contractors for road freight services they provide on your behalf.

    Payments made to employees are not included in your TPAR.

    If your business provides mixed services, not just road freight services, you may need to lodge a TPAR if the payments you receive for road freight and courier services make up 10% or more of your total GST turnover.

    You must reassess whether you need to lodge a TPAR each year.

    Your first TPAR for payments made to contractors from 1 July 2019 to 30 June 2020, will be due by 28 August 2020.

    To make it easier to complete your TPAR, you should check the way you currently record information about your payments to contractors.

    On this page:

    See also:

    What are road freight services?

    Road freight services include transportation of freight by road, the renting of trucks with drivers for road freight transport, and road vehicle towing services.

    ‘Transportation of freight by road’ is the transport by road of goods, wares, merchandise, material or anything whether in its raw state or natural state, wholly or partly manufactured state, or of a solid, liquid or gaseous nature or otherwise, and/or livestock.

    Typically, road freight is used to transport goods in bulk using large vehicles.

    Examples include:

    • furniture removal services
    • log haulage services
    • road freight forwarding services
    • taxi truck services
    • truck hire services (with driver).

    Road freight services don't include:

    • passenger transport services (such as buses and taxis)
    • courier services – however, these services are reportable on the TPAR from 1 July 2018 (see courier services)
    • operation of road freight terminals
    • providing crating and packing for road freight transport
    • leasing or hiring trucks without drivers.

    If an arrangement with your customer involves providing both goods and road freight services, you need to determine whether the road freight services are:

    • a composite supply of delivering the goods – the delivery is integral, ancillary or incidental to the supply of the goods (and therefore the freight involved will not constitute 'a road freight service'), or
    • a mixed supply of road freight services and goods – the delivery is a significant component, or could realistically be made as a separate supply and therefore a 'road freight service' (excluding the component for goods).

    Businesses providing mixed services

    From 1 July 2019, if your business provides other services, in addition to road freight and courier services, you will need to work out what percentage of the payments you receive are for both road freight and courier services each financial year to determine if you need to lodge a TPAR.

    If the total payments you receive for road freight and courier services are:

    • 10% or more of your GST turnover – you must lodge a TPAR
    • less than 10% of your GST turnover – you don't need to lodge a TPAR.

    You can choose to lodge a TPAR even if you think you don't need to. For example, if you're not sure if your payments for road freight and courier services will amount to less than 10% of your GST turnover for the financial year you should ensure you are recording the payments you make to contractors anyway. You can choose to lodge a TPAR even if you're under the 10% threshold.

    To work out if you need to lodge a TPAR, use the following three steps:

    Step 1: Calculate your total payments received for road freight services and courier services

    Add up all the payments your business received for road freight and courier services during the financial year, regardless of whether an employee or a contractor performed those services on your behalf.

    Don't include payments:

    • you make to contractors for providing these services on your behalf
    • where the road freight or courier services provided are only ancillary or incidental to the goods or other services your business provided.

    Step 2: Calculate your current or projected GST turnover

    If you have been operating your business for:

    • the full financial year – use your current GST turnover for the year
    • less than 12 months of the financial year – you must use your projected GST turnover by working out what your GST turnover will be for the next full financial year.

    Your GST turnover is your gross business income (not your profit) excluding any:

    • GST you included in sales to your customers
    • sales that are not for payment and are not taxable
    • sales not connected with an enterprise you run
    • input-taxed sales you make
    • sales not connected with Australia.

    Step 3: Calculate what percent of your GST turnover is from road freight and courier services

    You can calculate this percentage by using the following formula each financial year:

    Total payments received for road freight and courier services × 100 divided by Current or projected GST turnover

    If 10% or more of your GST turnover for the financial year is from road freight or courier services and you've also made payments to contractors for road freight or courier services during the year, you must lodge a TPAR.

    Examples – road freight services

    The following examples demonstrate the meaning of 'providing road freight services' and whether or not a business providing those services needs to lodge a TPAR.

    Remember, for road freight services, your first TPAR will be due by 28 August 2020 (for payments made to contractors from 1 July 2019 to 30 June 2020). This must include any payments made to contractors for courier services. If you provide courier services prior to 1 July 2019, you will need to lodge a TPAR sooner (see courier services).

    Example: A business providing road freight services

    Longhaul Freight Pty Ltd has an ABN, and has contracts to pick up and deliver bulk groceries from grocery suppliers to supermarket stores. It engages contractors (driver-owners with semi-trailers) to provide this service.

    Longhaul is providing a road freight service by transporting bulk quantities of groceries. The contractor drivers, who are moving the freight by road for Longhaul, are providing road freight services on behalf of Longhaul.

    Longhaul has been operating for the full financial year.

    At the end of the financial year, if the total payments Longhaul Freight Pty Ltd received for road freight services is 10% or more of its current GST turnover, it will need to report the payments it makes to contractors for these services in a TPAR.

    Longhaul has also engaged contractors to provide business administration services. These contractors are not engaged to provide road freight services, nor are they engaged to provide a service on Longhaul’s behalf. Therefore, payments to these contractors don't need to be reported on the TPAR.

    Longhaul has an agreement to transport a consignment of bulk groceries to a supermarket in a remote location. There is only one main road to this location from Longhaul’s nearest distribution centre and the road is not suitable for heavy vehicles. Longhaul divides the consignment into smaller loads and engages contractor drivers to transport these smaller loads in vans to the supermarket.

    As the agreement between parties was for the transportation of a bulk quantity from one location to another, Longhaul is still supplying a road freight service (not a courier service) even though it transports the groceries in smaller vehicles. The manner of transport does not necessarily change the nature of the service provided. Longhaul is required to report payments made to these contractor drivers, which occur on or after 1 July 2019, in a TPAR.

    Example: A freight forwarding business

    Rapport Freight Pty Ltd has an ABN and provides freight forwarding services across Australia. Rapport Freight occasionally uses contractors (which supply their own vehicles) to provide freight forwarding services on Rapport Freight’s behalf.

    Rapport Freight is engaged to transport a large consignment of new cars for a car company. The cars arrive at a port in Fremantle. Rapport Freight uses its contractors to transport these cars via road to the car company’s warehouse in Melbourne.

    Rapport Freight’s transportation of the consignment of cars via road is a road freight service that it supplies to its car company client.

    Rapport Freight has been operating for the full financial year.

    At the end of the financial year, if the total payments Rapport Freight received for road freight services is 10% or more of its current GST turnover, it will need to report the payments it makes to contractors for these services in a TPAR.

    Example: A business providing two relevant services

    Big Rig Services has an ABN and provides logistics support to its mining, construction and civil project customers. It provides a few different separate services to its clients.

    Big Rig’s primary service is transporting heavy earthmoving and mobile plant equipment between project sites. It also offers security services at the sites, outside of operating hours, to patrol perimeters and guard equipment. These are separate services.

    Big Rig engages contractor drivers and contractor security guards to provide these services on their behalf.

    Big Rig operates for the full 2019–20 financial year. At the end of 2019–20, the total current GST turnover for Big Rig is $10 million, of which Big Rig received:

    • $6 million for road freight services
    • $800,000 for providing security services.

    Big Rig must report payments for road freight and security services on their TPAR if the amounts they received for each of those services is 10% or more of Big Rig's current GST turnover.

    Because the payments Big Rig received for their:

    • road freight services are 60%, they must report the payments made to contractors for road freight services on their 2019–20 TPAR
    • security services are 8%, Big Rig is exempt from having to report their payments to security contractors made on their 2019–20 TPAR.

    Example: A business providing courier and road freight services

    Transport Traders Pty Ltd has an ABN and transports a wide variety of goods in bulk quantities for other businesses. It also has a separate business that provides parcel delivery services. Transport Traders, therefore, supplies both road freight and courier services.

    Transport Traders regularly engages contractors (who provide their own vehicles) in both the road freight and courier parts of its business to transport bulk goods and deliver parcels for Transport Traders’ clients.

    In the 2018–19 financial year, the total current GST turnover for Transport Traders is $5 million. This consists of $4.55 million received for its bulk goods transport business (road freight services) and $450,000 for its parcel delivery business (courier services).

    Transport Traders does not need to report payments to contractors for road freight services in the 2018–19 financial year because the taxable payments report system to road freight services applies only to payments made from 1 July 2019.

    The payments that Transport Traders receives for courier services in 2018–19 are 9% of its current GST turnover for the year, so Transport Traders is exempt from reporting payments to courier contractors it made in 2018–19.

    In the 2019–20 financial year, Transport Traders works out that:

    • the current GST turnover for Transport Traders is $7 million
    • amounts received for road freight services is $6.4 million
    • amounts received for courier services is $600,000.

    As road freight and courier service are counted as one category for TPAR reporting, Transport Traders must add together the total amounts received for road freight and courier services. If the combined amount is 10% or more of their total current GST turnover for 2019–20, they must report payments to contractors for both road freight and courier services on their TPAR.

    Transport Traders work out that total payments received for road freight and courier services is 100% of their current GST turnover for 2019–20.

    Therefore, Transport Traders must report the payments it makes to contractors who provide these services on its behalf.

    End of example

    Authorised by the Australian Government, Canberra 

    Last modified: 20 Dec 2018QC 57698