Operating outside the tax system

The ATO is focusing on small businesses that deliberately operate outside the tax, super and registry system. In particular, it is focusing on contractors that incorrectly report or omit income and taxi and ride-sourcing providers that are not registered for GST.

Contractors that provide any of the following services must report this income in their tax return

• Building and construction
• Courier
• Cleaning
  
• Information technology
  
• Road freight
  
• Security, investigation or surveillance

The ATO receives data from businesses that lodge a taxable payments annual report (TPAR) which includes payments made to contractors relating to the above services. Where there are discrepancies between the TPAR information and what the contractor reports in their return, the ATO may take action and penalties and interest could apply.

The information reported on contractor payments is normally included in the pre-fill for sole traders, and on the reported transactions service in the ATO online platform.

More details here. 

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