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The Payment Times Reporting Scheme at a glance

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Small business Machinery of Government (MoG) changes 2021
This content is under review. The small business function transferred to Treasury as a result of the Administrative Arrangements Order made on 15 April 2021 with effect from 15 April 2021.
 

The Payment Times Reporting Scheme commenced on 1 January 2021. It requires businesses to submit a report on their payment terms and practices. The reports are due each 6 months of an income year.

Businesses required to report are those that are:

  • constitutionally-covered
  • carry on an enterprise in Australia
  • meet the income threshold of over $100 million in total annual income

Also required to report are:

  • Commonwealth corporate entities and Commonwealth companies that meet the income threshold
  • entities with a total income of over $10 million that are members of a controlling corporation with a combined income of over $100 million

Constitutionally-covered entities that do not meet these requirements may volunteer to submit a report.

Entities that are registered under the Australian Charities and Not-for-Profits Commission Act 2012 are exempt from the reporting requirements.

Payment times reports

The first Payment times reports will be due from 1 July 2021.

Reports must be submitted to the Payment Times Reporting Regulator through the reporting portal. The reports are due within 3 months of the end of the reporting period.

The first reporting period for businesses with common income years will be 1 January 2021 to 30 June 2021. A common year may be an Australian Financial year or a calendar year.

The first submission of Payment times reports is due by 30 September 2021.

Reporting entities can access the portal through a myGovID authentication process. This will also give them access to the Payment times reporting small business identification tool.

The Payment times report will:

  • include aggregated data on the reporting entity’s payment terms and practices
  • identify the entity
  • include other relevant information about the entity

The Payment times report must be approved by either:

  • a responsible member of the entity
  • a responsible member of the entity’s controlling corporation

The signed Payment times report must be provided to the reporting entity’s principal governing body.

Unless otherwise stated, all reported values should be:

  • to the nearest whole number
  • in Australian dollars
  • inclusive of GST

Small Business Identification tool

The reporting requirements are supported by the Payment times reporting small business identification tool (SBI tool). The SBI tool assists reporting entities to identify, and report on, their small business suppliers.

The SBI tool reduces the compliance burden for reporting entities by streamlining the small business identification process.

Through the SBI tool, a large business will upload their suppliers’ Australian Business Numbers (ABNs) using a CSV document. The tool will return a list of small business supplier ABNs that are in-scope for the reporting obligation.

Payment Times Reporting Regulator

The Payment Times Reporting Regulator administers the scheme.

The Regulator can enforce compliance with the reporting requirements. Reporting entities may contravene a civil penalty provision of the Act if they:

  • fail to give a report
  • provide a false or misleading report
  • fail to maintain payment records
  • fail to comply with an audit notice
  • fail to assist the auditor

The Regulator has powers to:

  • monitor compliance
  • investigate suspected non-compliance
  • require compliance audits and impose infringement notices
  • apply to a court for civil penalty orders

The Regulator will publish the information from the reports on the Payment times register. It will be available to the public on paymenttimes.industry.gov.au.

The Regulator may also publish details of non-compliance on the Payment times register or elsewhere.

The Regulator will adopt a graduated approach to compliance and enforcement, which may include:

  • engaging in outreach and education activities to raise awareness of the reporting requirements
  • working with a reporting entity to address compliance issues as a first step

The more coercive compliance and enforcement tools may be used if reporting entities demonstrate a significant or repeated failure to comply with the Act.

Reporting entities have a 12-month transition period from the commencement of the scheme before compliance activities commence in 2022. This will enable them to familiarise themselves with the reporting requirements before the Regulator seeks to enforce compliance.