The ATO have a new reporting requirement for businesses in the building and construction industry. These businesses will need to report to the ATO the total payments they make to each contractor for building and construction services each year. The first report is due from 21 July 2013 for reportable payments made to contractors from 1 July 2012. For all the details, head on over to the ATO website.
Xero will make it easy to generate the report in time for your reporting obligations next year – all you have to do is use dedicated accounts when creating relevant spend money or accounts payable transactions. You may already have account codes for assigning contractor expenses, if not you can easily create one. For example, you could create an account called “476 – Contractors – Reportable Payments”.
Xero will use these codes and a new flag that you’ll be able to add to contacts to drive a new report that we’ll release in time for July 2013.
Easy as that.
This is fantastic news thank you Xero. Have had 3 building firms sign up to Xero in as many days, simply because their accountants have been proactive advising their clients of new compliance and reporting requirements.
Thank you Xero! I knew you would have a solution.
Thanks Tim- will it be possible just to flag by contacts rather than set up new account codes? ie we’d like to flag ABC Electrical Pty Ltd but continue to allocate ABC Electrical invoices to the Electrical account (which will also have other (non reportable) expenses allocated to it).
If not- Will we need to amend our accounts to Electrical – reportable and Electrical – non reportable ? Plumbing- reportable and Plumbing- not reportable? etc…
Would be much easier to just flag by contact!
Hi @Jenny – Yes! you’ll be able to choose to create the report based on combinations of contact groups and account codes (all or selected) in the report filters.
You’ll also be able to drill down into the total for a contact being included in the report to review the transactions and exclude any as required.
Hi this is fantastic news. I’m just wondering if a release date has been scheduled for this report?
Hi. I am unable to see the “flag” in the edit contact area. Help?
@Kimberlee We’re actively developing the report and you’ll have it in time for the first report lodgement due dates.
@Nicole We’re looking to give you the ability to create the report based on combinations of contact groups and account codes (all or selected) in the report filters.
You can easily create a contact group in Xero. Heres a Help Centre link for creating contact groups: http://help.xero.com/#Contacts$BK_ContactGroup
Hi Tim, can you confirm whether there will be a new contact flag created which is required for the report or whether you need to create a group as mentioned in your last post. Or can both options be used?
@Scott, we ended up not relying on a specific contact flag. You will be able to target the payments to include in the report by using a combination of contact groups and/or specific accounts.
It’s no mandatory, but you could find it easier to run the report if you assign the contacts you’ve made reportable payments to a Contact Group, if you haven’t been allocating the payments to specific accounts.
Hi Tim,
Is there any update on when this will be released? We are interested to see how it will work and make sure we have all the inputs covered.
Thanks
@Annie and everyone
Release is really close, a few weeks maybe. You will have it well before July 1 and in plenty of time for reporting requirements.
I could well be getting into trouble for this but we do appreciate you’re keen to see how it works – take a look at this video to see how straightforward it’ll all be. http://vimeo.com/67350520
Why does the report exclude payments made from credit cards?
Thanks
@Annie, general feedback was that most payments would be from a bank account proper and use of credit card would be unlikely. That said we have had some requests for this so you’ll be pleased to hear we are going to include payments made from credit cards, paypal and accounts marked as enable payments in the next release. This will be before the deadline for reporting, so maybe hold off any that this applies to.
Hi Tim,
Could you please give an indicative date for this next release.
Thanks
@Annie, the release was this morning.
Hey Guys,
Just came across one Article. This may interest you
http://reliablebookkeepingservices.com.au/taxable-payments-reporting-building-construction-industry/