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JobKeeper ruling on backdated ABNs appealed by Tax Office

A recent decision from the Administrative Appeals Tribunal allowing a sole trader with a backdated ABN access to the JobKeeper program has been appealed by the Australian Taxation Office.

JobKeeper ruling on backdated ABNs appealed by Tax Office
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  • Adrian Flores
  • January 20, 2021
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In December 2020, the Administrative Appeals Tribunal (AAT) handed down its decision in Apted and Federal Commissioner of Taxation [2020] AATA 5139.

It decided that Mr Apted met the requirement to have an Australian business number (ABN) on 12 March 2020 which made him eligible for JobKeeper payments.

In response, the ATO lodged an appeal in the Federal Court of Australia concerning this decision.

“Given the importance of establishing clarity on these matters as soon as possible, we have applied for the appeal to be expedited through the courts,” the ATO said on its website.

“While the appeal outcome is pending, we will continue to resolve matters where an eligible business participant’s eligibility can be determined in a manner favourable to them.

“However, we will not pre-emptively finalise decisions in circumstances where we determine a client does not satisfy the eligibility criteria but consider they might become eligible depending on the views of the Full Federal Court on the issues in this case.

“Where the client would like us to make a decision prior to the Full Federal Court appeal decision, we will apply the current ATO view for sole traders and partnerships, trusts and companies.”

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 2018–19 tax return or an activity statement for the period between 1 July 2018 and 12 March 2020.

Mr Apted 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.

ATO takes similar stance to cash flow boost

The ATO said it will take a similar approach to the cash flow boost, which also requires a business to have held an ABN on 12 March 2020.

Eligible businesses and not-for-profit (NFP) organisations who employ staff will receive between $20,000 and $100,000 in cash flow boost amounts by lodging their activity statements up to the month or quarter of September 2020.

The cash flow boosts will be delivered as credits in the activity statement system, and will generally be equivalent to the amount withheld from wages paid to employees for each monthly or quarterly period from March to June 2020, the ATO said.

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