Payment times reports due 31 March 2024

An increase in enforcement action by the Regulator^_[1] under the Payment Times Reporting Act 2020 (Cth) (PTR Act) has been happening over the last 12 months. Companies covered as reporting entities under the PTR Act should ensure that their reports for the period 1 July to 31 December 2023 are lodged by 31 March 2024.

Companies that are required to report under the PTR Act include companies carrying on business in Australia with an income of more than $100 million for their most recent income year, and also companies in a corporate group where the company’s income was at least $10 million and the corporate group’s income was more than $100 million. Companies registered under the Australia Charities and Not-for-profits Commission Act 2012 (Cth) are not reporting entities.

The Regulator under the PTR Act is able to check ATO corporate transparency data to check whether companies with a relevant income level are reporting as required under the Act. Where the Regulator has found evidence that relevant companies have not lodged payment time reports it is contacting the companies by email to check whether they are in fact a reporting entity, and to require that overdue reports are lodged.

The Regulator sent emails to companies they thought were reporting entities, but which had not lodged required reports, on 15 March 2023 and 14 September 2023. These emails pointed out the Regulator’s enforcement powers and posed questions about compliance. The Regulator’s enforcement powers include:

• publishing the details of non-complying companies on its website;
• undertaking an investigation or compliance audit;
• issuing an infringement notice; and
• pursuing civil penalties.

Section 15 of the PTR Act states that current civil penalty for a reporting entity that has failed to comply with a reporting obligation is up to 60 penalty units (or A$18,780).

While there has been criticism of aspects of the PTR Act in the independent review of the PTR Act conducted by Dr Craig Emerson in 2023, the obligations to lodge reports under the PTR Act remain afoot.

Payment times reports need to include data on the times within which the company has paid invoices from “small businesses” as defined in the Act. Under the PTR Act a “small business” means an entity that is described as a small business by the Payment Times Small Business Identification Tool (which identifies enterprises in Australia with an annual turnover of less than $10 million). The Regulator offers the Small Business Identification Tool through the Payment Times Reporting Portal.

Payment times reports are lodged via the reporting portal on the Regulator’s website. The reporting requirements are complex, but there are a number of Information Sheets prepared by the Regulator available on its “updated guidance material” webpage, including ones providing further information on preparing and lodging reports, the reporting requirements and how to prepare reports for corporate groups.

As noted above, if an entity is part of a corporate group, it may be subject to a lower income threshold when assessing whether it is required to report and, if so, it will have additional reporting requirements that require it to identify other head, controlling and subsidiary entities within the group in its reporting.

JWS has experience in assisting clients in responding to threats of enforcement action over the last 12 months and, if a review of your spam filter reveals any of the emails sent on 15 March and 14 September last year, we are available to assist.