ATO seeks urgent appeal over tribunal’s decision to grant sole trader access to JobKeeper

The Australian Taxation Office (ATO) has lodged an appeal in the Federal Court in a bid to overturn a decision made by the Administrative Appeals Tribunal (AAT) in December that granted a sole trader access to JobKeeper payments. 

The ATO will seek to have the appeal expedited through the courts and will provide test case funding given the urgency of the matter and the potential implications for small business operators. 

The appeal relates to the AAT’s ruling in Apted and Federal Commissioner of Taxation, which was handed down on December 21, 2020. 

In this case, the ATO had initially said sole trader Jeremy Apted was not eligible for JobKeeper wage subsidies as his ABN was not active at March 12, 2020 — the date nominated in the eligibility criteria for the wage subsidy program. 

However, the AAT ruled in December that Apted did in fact meet the JobKeeper eligibility criteria of having an ABN on March 12, 2020, because the Australian Business Registry had reactivated an old ABN and backdated the reactivation to before March 12. 

The tribunal heard evidence that Apted had been carrying on a business and recording income from the business prior to March 12, and found his failure to reactivate his ABN in 2019 was an “oversight rather than a deliberate effort to conduct a business without an ABN”. 

“We are satisfied the applicant is the kind of person who was intended to benefit from the JobKeeper scheme,” said AAT president Justice D G Thomas. 

A notice to appeal the decision was lodged with the Federal Court on Friday, January 15, and in a notice published on Monday, the ATO said it will continue to resolve matters “where an eligible business participant’s eligibility can be determined in a manner favourable to them” while it waits for the outcome of its appeal to the Federal Court. 

However, the tax office said it will not “pre-emptively finalise decisions” in cases where the ATO has determined a business operator does not meet the eligibility criteria for JobKeeper but they may become eligible depending on the court’s ruling. 

If business operators want the ATO to make a decision in their case prior to the court’s ruling, the tax office said it will apply its current approach for sole traders, partnerships, trusts and companies. 

This will also be the case for questions about eligibility for the Cash Flow Boost payments. 

The ATO said it will provide more information to business operators as it becomes available.