The Australian Taxation Office has recently lost a case in the Federal Court against a decision they had made earlier on a sole trader whose ABN and GST registration was backdated after the Taxpayer cancelled it in 2018.
The name of the case is Commissioner of Taxation v Apted  FCAFC 45. The Taxpayer’s name is Jeremy Apted; he had obtained his ABN in 2012. However, he cancelled the ABN in 2018, and he started work in September 2019, but he failed to activate his ABN thinking he only needs to activate it if the ABN is to be registered with GST.
When COVID 19 hits, Mr Apted applied to reactivate the ABN and then applied for Jobkeeper; however, ATO declined the job keeper application, citing that the Taxpayer did not have the ABN on 12 March 2020. Upon receiving this news, the Taxpayer promptly went to the Australian Business Register and applied to backdate his ABN to 1 July 2019.
However, even with the backdate, ATO declined the job keeper application, and as such, the Taxpayer applied to the Administrative Appeals Tribunal for review. The AAT then supported the Taxpayer’s position, citing that the Taxpayer has satisfied all other eligibility criteria and should benefit from the job keeper payment.
ATO then went to the full court to appeal the AAT decision and was knocked off in March 2021. The judge Honourable Justice John Logan stated that the Australian Business Registrar —
“The Commissioner of Taxation in another guise — had accepted that Mr Apted was carrying on an enterprise before 12 March 2020, giving “pause for thought as to why Mr Apted has been put to so much bother about his eligibility to receive a payment the object of which ‘is to provide financial support directly or indirectly to entities that are directly or indirectly affected by the coronavirus known as COVID-19”
At the time, ATO is still thinking to appeal the decision to the high court. However, today they had announced that they accept the findings and will not appeal. The Australian Taxation Office will then review the past prior cases where they declined the job keeper and cashflow boost applications. They want to ascertain whether some of the decision rationales were different from the court findings. If they are, then the ATO can make the necessary rectification. It is essential that if you had been refused of Jobkeeper and/or cash flow boost before, please come and talk to EndureGo Tax. As one of the leading professional and experienced accountant and tax agent in Inner West Sydney and Adelaide, we can help you. We had helped one enterprise object to a decision from the ATO. The objection was approved in total, meaning the Taxpayer does not need to return the nearly $20,000 job keeper overpayment. to the ATO.
As one of the leading practising CPA accountant in inner west Sydney and Adelaide, I went to a technical meeting held by the current Tax Ombudsman Karen Payne, and we had some discussion about the direction of this kind of job keeper. Also, it is important to note, that ATO had previously declined the job keeper payment because the enterprise did not make a sale. Hence ATO is saying they are not in the enterprise, however, recently, the Inspector General Taxation has approached ATO and asked whether financial supply provision like an opening bank account, entering into the loan can constitute as a taxable supply, and the answer is a yes.
The ramification of this court decision is that the broader application is that in every decision that the commissioner has made where he has refused to exercise discretion, he now needs to go back and check it because the Full Federal Court has said you’ve taken a far too narrow approach in exercising the discretion and you need to look at the facts of the Taxpayer,”
If you had been refused of Jobkeeper or Cashflow Boost payment previously, now is an excellent time to come and talk to us; as the leading practising accountant and tax agent in Sydney and Adelaide, we will be able to help. Our number is 1800 841 312