Thousands of Australian businesses are being warned they have just weeks left to lodge a taxable payments annual report (TPAR) with the ATO. The system was developed to help crack down on dodgy businesses doing “cashies” and stop contractors from not reporting or under-reporting their income.

Businesses in the building and construction industry, along with those that provide cleaning, courier and road freight, IT and security, investigation or surveillance services and have paid contractors for these services, need to lodge a TPAR. The deadline is August 28 each year.

The ATO revealed it issued more than $5 million in penalties to 2,760 businesses for 3,338 outstanding TPAR during the 2024-25 financial year.

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ATO assistant commissioner Tony Goding said the system ensured contractors who provided certain services “report all their income and pay the right amount of tax”.

“This helps keep a level playing field by making sure all businesses pay their fair share of tax,” Goding said.

Last financial year, the tax office said more than $485 billion in gross TPAR payments made by nearly 176,000 businesses to more than 1.3 million contractors were reported.

“This transparency enabled the use of pre-fill data and transaction services reports to support accurate reporting and reduce non-compliance among contractors,” Goding said.

Government entities that need to report grants paid to people or organisations with an ABN also need to lodge a TPAR.

The shadow economy is estimated to cost the Australian economy $12.4 billion each year in unpaid taxes.

Aussies can check if they need to lodge a TPAR and lodge online.

'Red flags' for businesses

The ATO previously noted that not lodging a TPAR may be seen as a “red flag” and it could “prompt closer scrutiny”.

Other information like not including income, not lodging tax returns or activity statements, over claiming GST credits and misusing Australian business numbers, were also red flags.

The ATO recently issued a warning to businesses considering committing GST fraud, making dishonest claims and falsifying invoices.

ATO assistant commissioner Adam O'Grady said the fraud was currently mainly within the property and construction industry.

"While the numbers of businesses involved are relatively small, some are attempting to claim tens of millions of dollars in GST refunds they’re not entitled to," O’Grady said.