Contractors reminded to report income

The Australian Taxation Office (ATO) is reminding businesses that use contractors to report their actual income at all times, revealing that their new Taxable Payments Reporting System (TPRS) will help them ensure that the $172 billion of payments made to contractors annually have been properly declared.

The ATO is utilising the TPRS data to draw attention to income from contracting work so that it can be easily added to tax returns at tax time, as well as to check that businesses are registered for GST (if required) and are using valid Australian Business Numbers.

The ATO is particularly keen to highlight the fact that 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 the ATO of payments made to these contractors annually.

“More than 158,000 businesses have now reported all payments made to contractors in the 2019-20 year to us,” ATO Assistant Commissioner Peter 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.

“Where we discover a discrepancy, our first step is always to contact the taxpayer or their tax professional to check they have fully reported these payments in their tax return,” Holt added.

The ATO encourages 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. This will help loss of income to the community in revenue through unpaid tax as a result of deliberate non-reporting or under-reporting of income, a figure that last year reached $6.7 billion.

“Honest courier drivers do the right thing: they pay their rego, pay their road tolls, stick to the speed limit, and pay their taxes,” Holt said. “It’s not fair that some dishonest drivers get to skip the ‘toll booth’ and get an advantage over their honest competitors.”

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