Accounting for the Building & Construction Industry

Tradespeople and business' that operate in the Building and Construction industry face some unique compliance obligations from the Australian Taxation Office (ATO).


Contractor Reporting:

In the 2012-2013 year, the ATO introduced a reporting obligation which requires businesses in the Building and Construction industry to report payments to contractors in an attempt to catch people not declaring cash income.  The ATO uses data matching technology to ensure reported income is declared.


The ATO has also developed Business Benchmarks as a way to predict typical business expenses for different industries.


 The ATO uses this information as a guide to predict what certain expenses should be for a business like :

  • Cost of Materials

  • Motor Vehicle Expenses

  • Rent Expenses

If these expenses look high for your industry, you may be subject to audit.


The ATO initially developed these benchmarks with a focus on the Building and Construction Industry and have now expanded their benchmarking to other industries.  The benchmarks the ATO uses in the Building and Construction industry now include:


  • Air conditioning, refrigeration and heating services

  • Alarm systems installation - fire and security

  • Blocklaying services

  • Bricklaying services

  • Carpentry services

  • Carpet laying services

  • Cement rendering

  • Concreting services

  • Electrical services

  • Fence construction

  • Floor covering retailing

  • Glazing services

  • Landscape construction

  • Painting services

  • Panel beating and smash repairs

  • Plastering and ceiling services

  • Plumbing services

  • Roofing services - includes roof tiling, guttering and metal roofing

  • Tiling services - floor and wall

  • Timber floor sanding


Proactive Accounting:

We help businesses in these industries understand and meet their obligations.  We can help you set up your contractors correctly in your Xero file so that reporting is easy and accurate.


We monitor your businesses performance against ATO benchmarks each quarter and identify any discrepancies early.  We also ensure your expenses are reported correctly so that the ATO is using the correct data. 


Contact us for a chat about how we can help your business.


More Reading

The Sydney Morning Herald - Can you still run a cash business?

The Sydney Morning Herald - Contractors in the cash economy get hit with $2.3 billion in tax bills


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