On 21 December 2020, the Administrative Appeals Tribunal (AAT) directed the Commissioner of Taxation (Commissioner) to register the small business applicant for JobKeeper in the nation's first JobKeeper eligibility review – a case led by Holding Redlich's national tax litigation and disputes team.
The case, which we discussed here, involves a sole trader (Applicant) being denied JobKeeper by the Commissioner because he did not have an active ABN on 12 March 2020. However, the Applicant had his old ABN reactivated with an effective date in 2019 (i.e. before 12 March 2020). Although the JobKeeper legislation gives the Commissioner a discretion to provide the Applicant with additional time after 12 March 2020 to comply with the requirements, the Commissioner refused to exercise his discretion and stated that this was not a decision that could be reviewed by the AAT.
The AAT held that:
- the requirement for an applicant to have an ABN at 12 March 2020 can be satisfied by registering the ABN after that date if the Australian Business Register records the applicable date as being before 12 March 2020
- the discretion that the Commissioner has to provide additional time for applicants to do what needs to be done to satisfy JobKeeper requirements is reviewable by the AAT
- the Commissioner has not been properly considering all necessary matters in deciding whether or not to exercise his discretion to allow more time for applicants to do what needs to be done to satisfy JobKeeper requirements.
In reaching these conclusions, the AAT said that JobKeeper applications should be considered in a way that does not create procedural obstacles to ensure qualified businesses can gain access to the scheme. In particular:
"The JobKeeper scheme was created to deliver urgent assistance to active businesses with a minimum of fuss in the context of a pandemic. The Rules provided for a streamlined decision-making process that permitted the Commissioner to quickly and flexibly assess applications for payments. An interpretation that tended to create procedural obstacles to (or discontinuities in) the streamlined decision-making process would be inimical to that purpose."
What does this mean?
Small businesses that have been refused JobKeeper might now qualify for JobKeeper – and be entitled to make claims back until the beginning of the scheme in April 2020. It will probably take some time for the ATO to decide its response to the decision and review all affected cases.
In the meantime, business owners need to ensure their rights are protected. There are strict timeframes for filing objections and appeals. If you don't comply with those timelines, you can lose your rights to JobKeeper. Before closing off for the year, do a quick check of any adverse JobKeeper decisions to see whether you need to file objections or appeals. Don't let time limits lapse.
If you or your clients are experiencing JobKeeper challenges with the ATO, particularly with the use of one of the Commissioner's discretions, please contact our team for assistance.
This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.