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ATO loses JobKeeper test case in the Full Federal Court

A sole trader has been granted access to JobKeeper after the Full Federal Court unanimously ruled that the ATO had erred in its decision not to grant the business more time to establish its eligibility.

“As is made plain by government announcements and the provisions of the legislation, the JobKeeper payment was intended to benefit taxpayers in Mr Apted’s general circumstances,” said Honourable Justice Thomas Thawley.

“The commissioner, in his reasons, did not point to any good reason not to exercise the discretion in s 11(6) in Mr Apted’s favour; it is clear that the real reason for the commissioner’s refusal to exercise the discretion was the lack of ABN registration on 12 March 2020.

“But this was the very thing which lay the foundation for the exercise of the discretion. Of itself, this was not a proper basis to refuse to exercise the discretion.”

Honourable Justice John Logan also pointed out 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 in relation to 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’.”

“The broader application is that in every decision that the commissioner has made where he has refused to exercise a 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,” Ms Williamson told Accountants Daily.

“A lot of state relief was based on the fact that you needed to be registered for JobKeeper, so there’s going to be flow-on issues if businesses can now get it.”

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