ATO to review JobKeeper and Cash Flow Boost denials


Thousands of business that had their applications for JobKeeper and Cash Flow Boost denied will automatically have their cases review by the ATO following a decision in the Federal Court in March.

The ATO has conceded that decisions were made to deny funding based on its erroneous interpretation of its discretion to grant further time for a business to hold an ABN or provide notice to the commissioner of assessable income or supplies.

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The revelation comes after the Full Federal Court had ruled in March that the ATO’s use of the discretion was narrower than intended.

A sole trader has been granted access to JobKeeper after the Full Federal Court unanimously ruled that the ATO had erred in its decision not to grant the business more time to establish its eligibility.

The JobKeeper test case centered around sole trader Jeremy Apted and whether he met an eligibility requirement to hold an ABN on or before 12 March 2020.  Mr Apted, a specialist retail valuer, had held an ABN since 2012 but cancelled it in 2018 as he sought retirement. He resumed work in September 2019 but failed to reactivate his ABN because he mistakenly assumed that he only needed one if he was required to be registered for GST.

When COVID-19 struck, Mr Apted reactivated his ABN and applied for JobKeeper, but was knocked back because he missed the 12 March 2020 deadline, prompting him to reach out to the Australian Business Registrar to successfully backdate his ABN reactivation to 1 July 2019.  Despite the backdated ABN registration, the ATO disallowed Mr Apted’s objection, leading the taxpayer to apply to the Administrative Appeals Tribunal (AAT) for a review.

The tribunal found in favour of Mr Apted noting that he satisfied all of the eligibility criteria and was “the kind of person who was intended to benefit from the JobKeeper scheme”.

The Tax Institutes senior Advocate, Robyn Jacobson, said, “For clients who received a previous decision which declined to exercise the commissioner’s discretion, the commissioner will automatically review their circumstances and whether his discretion should be applied. The ATO will contact these taxpayers when they have completed their review or if further information is required,” Ms 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.  “I would expect it would affect thousands of taxpayers.”

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