The ATO said it is using the data to proactively contact contractors to make sure they haven’t forgotten to declare the income reported through the TPRS.
Further, the regulator said it is using the TPRS data to draw attention to income from contracting work so that it can be easily added to tax returns at tax time.
The ATO said information reported through TPRS also allows it to check that businesses are registered for GST if required and are using valid Australian business numbers.
Businesses that pay contractors in the courier, cleaning, building and construction, road freight, information technology, security, investigation, or surveillance services industries are required to notify of payments made to contractors annually, the ATO said.
The ATO reminded businesses that deliberately not reporting or under-reporting business income to the ATO contributes to the shadow economy.
Further, it estimated that small businesses operating in the shadow economy cost the community more than $6.7 billion in unpaid tax every year.
ATO assistant commissioner Peter Holt said, because of TPRS, the ATO now has a clearer view than ever before of payments made to contractors in these industries.
“More than 158,000 businesses have now reported all payments made to contractors in the 2019–20 year to us,” Mr Holt said.
“This data, combined with our sophisticated data and analytics capability, means our field of vision to detect unreported income is better than ever.”
Mr Holt said whenever the ATO discovers a discrepancy, its first step is always to contact the taxpayer or their tax professional to check they have fully reported these payments in their tax return.
He encouraged taxpayers who have not declared or under-declared income from contract work to lodge an amendment request or speak to their registered tax professional for assistance.
“Honest courier drivers do the right thing: they pay their rego, pay their road tolls, stick to the speed limit, and pay their taxes,” Mr Holt said.
“It’s not fair that some dishonest drivers get to skip the ‘toll booth’ and get an advantage over their honest competitors.”