The ATO has said that it is using the Taxable Payments Reporting System (TPRS) data to ensure that more than $172 billion of payments are declared properly by contractors.

Businesses that use contractors in the courier, cleaning, building and construction, road freight, information technology, security, investigation, or surveillance services industries must notify the ATO of payments made to contractors annually.

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.

The ATO is using the TPRS data to proactively contact contractors to make sure that they have not forgotten to declare the income reported through the TPRS.

It is also using the data to draw attention to income from contracting work to be easily added to tax returns at tax time. Information reported through the TPRS also allows the ATO to check that businesses are registered for GST if required and are using valid Australian Business Numbers.

The ATO urges 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.