JobKeeper, Cash Flow Boost denials revisited, reconsidered

Neville Birthisel

In the wake of the taxpayer’s victory in the Full Federal Court JobKeeper case Commissioner of Taxation v Apted [2021] FCAFC 45, the ATO has issued a Decision Impact Statement and a Law Administration Practice Statement

These set out its revised policy towards allowing a “later time” to hold and ABN (JobKeeper Rules s11(6)) or a “later time” to notify the ATO that a business was being carried on (JobKeeper Rules s11(7)(b)), to gain entitlement to JobKeeper support as an Eligible Business Participant.

Additionally, the ATO will review all JobKeeper applications where the ATO originally denied the taxpayer such “later time” and as a result the taxpayer was not considered to be eligible for JobKeeper.

This review will happen automatically and taxpayers will be notified if the original denial has been overturned in light of the Apted decision. The ATO also says it will consider if the court’s decision applies equally to the identical eligibility requirements for the Cash Flow Boost.

However, there is another group of taxpayers who originally assessed their eligibility to JobKeeper as an Eligible Business Participant based on the ATO’s initial interpretation of the JobKeeper rules. These taxpayers determined that an application for JobKeeper support would not be successful due to being out of time to hold an ABN or to give the Commissioner notice that a business was being carried on, and as a result did not apply for JobKeeper assistance.

This group of taxpayers is hidden from the ATO and therefore will not be included in the automatic reassessment of eligibility. Taxpayers in this group should work with their tax agents to reconsider their JobKeeper eligibility in light of the Decision Impact Statement and the Law Administration Practice Statement and contact the ATO where they consider the Commissioner would now allow extra time.

Understandably there are thousands of previously denied applications to be reconsidered, therefore the ATO has requested that tax agents vet potential new claims carefully, as frivolous claims will simply clog up the system and delay support to those taxpayers who are now genuinely eligible.

The ATO states that it aims to have all such cases reviewed and settled by the end of June, so practitioners with relevant clients may need to contact them soon.