On Melbourne Cup Day, the Administrative Appeals Tribunal fast-tracked a small-business owner’s appeal over a rejected JobKeeper application. According to the owner’s legal representative, Holding Redlich, the small-business owner’s JobKeeper entitlements were rejected by the ATO on a “technicality”.
The ATO’s refusal was based on the business owner not having a registered ABN on 12 March, despite paying tax on business income and managing a business as a sole trader.
JobKeeper eligibility rules require applicants to have had a registered ABN in place on 12 March and for a more than 30 per cent drop in turnover to have been recorded.
According to senior tax controversy partner at Holding Redlich Sue Williamson, her client previously ceased operating his business and terminated his ABN.
He then restarted his trade in 2019 and while he was paying tax on his profits, he forgot to apply for a new ABN.
Ms Williamson told MyBusiness that when her client applied for JobKeeper assistance due to a major loss of trade during the coronavirus pandemic, the ATO backdated his registration to 2019.
“The register now says his ABN has been valid since that date in 2019,” Ms Williamson said.
Regardless, his application was denied on the basis of the 12 March rule.
Ms Williamson believes that the ATO’s reasoning is unjust, arguing that business like that of the applicant’s should not be denied access to JobKeeper given that they satisfy the principle that underpins the program — supporting businesses put at risk by coronavirus lockdowns.
“The ATO has done an amazing job at administering the JobKeeper program at short notice; however, the decision to reject the business owner’s application in this case means small-business owners who do not qualify for state relief are denied a financial lifeline,” Ms Williamson said.
“Small businesses operating at 12 March which experienced a material (30 per cent plus) drop in turnover should have been fast-tracked for support, not rejected.”
‘Accountants, review your files’
With the judgment expected to be delivered at the end of November, Ms Williamson has advised accountants who have clients that have been refused JobKeeper to review their files.
“Accountants who have clients that have been refused JobKeeper should now be reviewing the relevant files to assess whether the client’s position could be improved if the applicant in this case succeeds,” Ms Williamson told MyBusiness.
“You should assess why claims were denied and check to see if there was an option to request the commissioner for further time to comply with an obligation.
“If so, request it. If a request for further time has been denied, speak to the client about lodging an objection to protect their rights.”