Failed JobKeeper applicants may get second chance

Content Summary

April 2021

This article was current at the time of publication.

There’s hope for hundreds of failed JobKeeper applicants following a 24 March 2021 decision by the Full Federal Court (FFC).

The FFC upheld the Administrative Appeals Tribunal’s (AAT) ruling in late 2020 in the case between sole trader Jeremy Apted, a retail valuer, and the Commissioner of Taxation. 

Specifically, the Court found that Apted was entitled to the wage subsidy, despite not holding an active Australian Business Number (ABN) on 12 March 2020.

To be eligible for JobKeeper and other coronavirus economic response benefits, businesses needed to meet various eligibility requirements, which included having an ABN on 12 March 2020. 

Commissioner's discretion

However, the Commissioner of Taxation was given the discretion to allow further time to qualify, being at “… a later time allowed by the Commissioner”. 

It has been rare for the Commissioner to extend the time, arguing that it was available only in limited circumstances, and the exercise of such discretion could not be reviewed by the AAT. 

However, the FFC held that the Commissioner’s decision not to exercise the later time discretion, was part of the reviewable decision.  

The Court stated that because of the beneficial nature of the JobKeeper legislation, the Commissioner should exercise his time discretions favourably to taxpayers unless a good reason was absent.

In the case before the Court, it was accepted that Apted had been carrying on a business before 12 March 2020 and failed to have an ABN on that date due to an oversight.

Given these circumstances, the court held that the AAT’s allowance of a time later than 12 March 2020 for Apted to obtain an ABN, was “entirely unremarkable”.

What taxpayers need to do

Sue Williamson FCPA, a partner at Holding Redlich and member of CPA Australia’s Taxation Centre of Excellence notes: “Taxpayers that have been denied access to benefits under the various Coronavirus economic response schemes because the Commissioner refused to exercise his time discretions favourably, should review their claims and take steps to seek review of the Commissioner’s decision.”

Any appeal by the Commissioner of Taxation to the High Court needs to be made by 21 April 2021.

The Australian Taxation Office is currently considering the implications of the decision, albeit emphasising that it doesn’t change the need to satisfy all other eligibility requirements. 

Although it may have postponed any decisions on pending applications, it will be contacting relevant applicants to provide an update.