Answers to HIA Questions to the Australian Taxation Office (ATO) on Reporting Payments

- FROM THE DIRECTOR’S DESK Answers to HIA Questions to the Australian Taxation Office (ATO) on Reporting Payments to Surveyors and Energy Efficiency Assessors

The HIA recently received feedback from the Australian Taxation Office as to whether or not the following payments need to be reported under the new taxable payments reporting regime:

 Surveyors undertaking a contour site survey on a property, including when no actual building work has commenced (such as where the property is still in planning); and

 Energy efficiency assessors, including where the assessor does not actually go onto the site to undertake the assessment (again, such as where the property is still in planning).

The ATO have provided the following response:

“A. Are payments made to sub-contractors for the following type of work required to be reported: Surveyors undertaking a contour site survey on a property, including when no actual building work has commenced (such as where the property is still in planning)

An activity can be a building and construction service before ‘actual building work has commenced’. For example, for the purposes of Taxable payments reporting, building and construction includes the design of future structures and also activities, like surveying, that are needed in order to produce a design.

Surveying is one of the activities that we list on our website as a building and construction service.

A business in the business in the building and construction industry would need to report payments made to contractors for surveying if it was performed as part of the design process in relation to a building, structure, work, surface or sub-surface.

B. Are payments made to sub-contractors for the following type of work required to be reported: Energy efficiency assessors, including where the assessor does not actually go onto the site to undertake the assessment (again, such as where the property is still in planning).

As I described above, an activity can be a building and construction service even before ‘actual building work has commenced’.

It is also possible to provide a building and construction service without actually visiting the building site. Some examples of building and construction services that could (potentially) be carried out by a contractor without visiting the building site are: architectural work, drafting and energy efficiency assessments.

In this example, I assume that the: 1. business paying the contractor is a ‘business in the building and construction industry’ and has an ABN 2. energy efficiency assessment is being performed on or in relation to a building, structure, work, surface or sub-surface (for convenience, let’s say that it is a building) that is being planned 3. the information from the energy efficiency assessment will be used to assist with decisions about the building’s design.

In this case, payments to contractors for energy efficiency assessments would need to be reported on a Taxable payments annual report.

However, the situation changes if we change the third assumption to: 3. the information from the energy efficiency assessment will NOT be used to assist with decisions about the building’s design.

In this alternative scenario the information from the energy efficiency assessment is not contributing to the construction of the building. Payments to contractors for energy efficiency assessments in this scenario would NOT need to be reported on a Taxable payments annual report.

If a business finds it difficult to distinguish between energy efficiency assessments that are reportable and those that are not, they can (if they wish) report all the payments to contractors for energy efficiency assessments.”

Should you have any queries in relation to the contractor reporting system then please do not hesitate to contact your HIA Workplace Advisor on 9492 9200 or email [email protected]