AAT overturns decision denying sole trader access to JobKeeper

In an AAT decision handed down on 21 December 2020 in Jeremy Apted v Commissioner of Taxation, the tribunal overturned the Commissioner of Taxation’s decision to deny a small business access to JobKeeper and substituted a decision that the applicant is entitled to the program.

Business owners are not entitled to JobKeeper unless, in addition to various other tests, as at 12 March 2020 they had an ABN and had lodged a 2018-2019 tax return or an activity statement for the period between 1 July 2018 and 12 March 2020. 

In the case of Jeremy Apted v Commissioner of Taxation, Mr Apted was carrying on a business and returning the income from the business as assessable income, but did not have an active ABN when he made the JobKeeper application to the Commissioner on 12 March 2020.

The applicant arranged for his old ABN to be reactivated with a date of effect in 2019 (i.e. before 12 March 2020) which was granted, however the Commissioner denied JobKeeper on the basis that the applicant did not have an ABN on 12 March 2020.

The Commissioner refused to exercise his discretion to allow extra time for the applicant to obtain an ABN, despite the legislation giving the Commissioner a discretion to provide further time beyond 12 March 2020 to comply with the requirements.

Remarking on the decision, Holding Redlich senior tax controversy partner Sue Williamson said this approach has denied countless hardworking small businesspeople much needed support during these troubled times. 

“In a difficult year, it’s been disappointing to see small business owners facing the worst economic circumstances in recent memory locked out of accessing desperately required support for simply not meeting an arbitrary 12 March deadline,” Ms Williamson said.

“The consequences can be heartbreaking, my team has seen every day Australians evicted from their businesses premises, had equipment taken by landlords, or come up against mental illnesses due to the stress of their hard built businesses and proud livelihoods being swept out from under their feet.”

Ms Williamson said it was pleasing to see the tribunal rule in favour of small business owners, as the judgement found that there is nothing to be achieved by denying the applicant access to the payments to make a point about the desirability of obtaining an ABN.

“In the scheme of what JobKeeper and the other measures have cost this country, these important small business claims would cost next to nothing. However, to these businesses and people it means everything,” she said.