In a recent update, the ATO has urged contractors to verify their pre-fill information against their own records and declare all their business income, including income not reported through a taxable payments annual report (TPAR).

ATO assistant commissioner Tony Goding said regardless of whether contractors have been paid through a platform, invoice private clients, or receive cash for work, they must declare all income they've earned.

"Leaving income out of your tax return doesn’t make it invisible to the ATO," said Goding.

The Tax Office has estimated that more than $1 billion in TPAR payments could be omitted or under-reported this year.

"This is shadow economy behaviour. It cheats the system, disadvantages honest businesses and deprives the community of funding for essential services," the regulator said.

The ATO has also estimated that around $25 billion in tax is lost to shadow economy behaviour each year.

For Tax Time 2026, Goding said that approximately $21 billion in payments made to contractors reported through TPARs will automatically appear as pre-filled income in eligible tax returns, helping 700,000 sole traders and individuals in business save time, reduce mistakes and lodge with greater confidence.

The Tax Office said that while the pre-fill was designed to make it easier for taxpayers to report the correct income, it may not be a complete record of all business income.

Contractors can update pre-filled information where it doesn't reflect their circumstances, the ATO said; however, they should have records to support any changes.

"If you change a pre-filled amount, you will need to provide a reason and should have documentation to substantiate it," Goding said.

The ATO told contractors that it continues to use a wide range of data sources to identify omitted income and detect businesses operating outside the tax system.

"Most contractors do the right thing and report what they earn. But those who deliberately hide income, operate off the books or under-report earnings should know the ATO is getting a clearer picture of their income than ever before," it said.

Goding said that leaving income out of a tax return doesn't make it disappear, with the ATO using a wide range of data and obligations and sophisticated analytics to detect businesses that aren't meeting their obligations.

"We’re making tax easier for honest businesses and harder for those who deliberately try to avoid paying the right amount of tax,’ Mr Goding said," he said.

Goding said the automated pre-fill had transformed the experience of lodging returns for employees and investors over many years and that the ATO was now expanding these benefits for contractors.

"By automatically bringing reported information into tax returns, we're helping people spend less time on paperwork and more time running their business," he said.

"The same data also helps us identify when income has been left out of a tax return, whether that's an honest mistake or a deliberate attempt to under-report earnings."

The ATO has also urged contractors to wait until after 28 August before lodging.

"Most businesses are required to submit a TPAR have until 28 August each year to report payments to the ATO. As a result, much of the new pre-fill information will only be available from late August," said Goding.

"Waiting until after 28 August gives you the best opportunity to access complete pre-fill information and reduces the likelihood of needing to amend your return later."

By: Miranda Brownlee | 10 August 2026 | accountantsdaily.com.au