From 1 July 2012 your business will need to report if the following apply:

• you are a business that is primarily in the building and construction industry
• you make payments to contractors for building and construction services
• you have any Australian Business Number (ABN)

For each contractor that the business uses, the following details need to be reported:

• ABN
• Name
• Address
• Gross amount paid for the financial year (total including GST)

Primarily in the building and construction industry

A business is considered to be primarily in the building and construction industry if:

• in the current financial year, 50% or more of the business income relates to building and construction services
• in the current financial year, 50% or more of the business income is derived from providing building and construction services
• in the financial year immediately before the current financial year, 50% or more of your business income was derived from providing building and construction services.

Building and construction services are services performed on, or in relation to, any part of a building, structure, works, surface or sub-surface.

Services include architectural services, bricklaying, cabinet making, decorating, demolition, engineering, fencing, glass and glazing work, installation work, landscaping, plastering, plumbing, stonework, surveying, swimming pool installation and weatherboarding.

The examples of buildings, structures, works, surfaces and sub-surfaces is similarly quite wide and capture most locations where any building or construction work might be performed.

When does the report need to be prepared and lodged?

The annual report of all payments is due by 21 July each year. The first report is due 21 July 2013 for the 2012-2013 financial year. If you lodge your Business Activity Statements quarterly, you may lodge by 28 July 2013 in this first year.

What payments are included or not included?

The report includes all payments made by a business performing building and construction services to its contractors.

As the report captures “payments” made to contractors, unpaid invoices at 30 June are not included in the report.

The report also does not capture payments where PAYG withholding was required from the payments. This includes employees, workers engaged under a voluntary agreement to withhold or under a labour-hire or on-hire arrangement, and contractors who do not quote an ABN.

You do not need to report if you are a home owner making payments to contractors, for example building or renovating your own home.

What should I do now?

Even though the reporting requirements do not start until 1 July 2012 and the first report is not due until 21 July 2013, it is important to set up the record keeping procedures now so that payments made to contractors can be easily captured, along with all the relevant information needed for each contractor.

By preparing yourself early, you will be ready for the reporting deadline and able to prepare the report within the 3 week deadline provided.

If you leave things until near the deadline you could find yourself sorting through an entire financial year’s worth of records wishing you had done something earlier!