ATO review opens up more businesses to JobKeeper eligibility

More Australian businesses may be eligible for JobKeeper in light of the ATO’s Decision Impact Statement after a ruling by the Federal court that a company, Apted, should have been eligible for support from the scheme having lodged an appeal against the Commissioner for Taxation’s decision that they were not.

One of the key conditions to be eligible for JobKeeper (on the basis of business participation) and cashflow boost is having held an ABN on 12 March 2020 and to have evidenced business activity prior to 12 March 2020, but the Commissioner may grant discretion to allow additional time for holding an ABN and providing notice of assessable income or supplies.

This condition was highlighted in the Full Federal Court decision in Commissioner of Taxation v Apted [2021] FCAFC 45 on 24 March 2021, which ruled in favour of the taxpayer. In response, the ATO issued its Decision Impact Statement on Apted on 29 April and updated PS LA 2020/1, acknowledging that the Commissioner’s discretion is broader than has been applied by the ATO to date.

The Tax Institute’s Senior Advocate, Robyn Jacobson, CTA said that she expected the ruling to affect thousands of taxpayers.

“The ATO will be identifying those taxpayers who have previously been denied JobKeeper or cash flow boost following a review or lodging an objection,” Jacobson said.

“There will be some taxpayers who never enrolled in JobKeeper because they thought they were not eligible or had sought advice and were advised that they were not eligible. These taxpayers will be able to contact the ATO for a review of their case.

“For taxpayers who received a previous decision in which the Commissioner declined to exercise his discretion and so missed out on stimulus assistance, the Commissioner will automatically review the circumstances and whether his discretion should be applied,” Jacobson added.

“The ATO will contact these taxpayers when they have completed their review or if further information is required.”

Jacobson warned, however, that this does not automatically mean the program would become a “free for all”, stressing that applicants for JobKeeper are still required to meet existing conditions.

“The decision doesn’t apply to other discretions within JobKeeper or cash flow boost, or in other parts of the tax law,” Jacobson said. “So, it doesn’t mean everyone who was previously denied JobKeeper or cash flow boost is now eligible.

“The Full Federal Court’s decision shows that the Commissioner disregarded factors that were considered by the Tribunal to be relevant in exercising the discretion, Jacobson added.

“The Full Federal Court decided that the Tribunal was correct to take those factors into account. If you need assistance or have a complaint about how your stimulus application has been handled, the Inspector-General of Taxation and Taxation Ombudsman is an excellent avenue for receiving that assistance.”

This article was first published on Inside Small Business.