The ATO has now committed to automatically reviewing decisions where it denied businesses access to JobKeeper and the cash flow boost based on its erroneous interpretation of its discretion to grant further time for a business to hold an ABN or provide notice to the commissioner of assessable income or supplies.
The revelation comes after the Full Federal Court had ruled in March that the ATO’s use of the discretion was narrower than intended.
The ATO on Thursday published its decision impact statement in response to the court case, confirming that it would not appeal the decision and that it would revisit earlier ATO decisions where the outcome may have been different if the court’s reasoning was applied.
The Tax Office has also updated its law administrative practice statement PSLA 2020/1 to reflect its broader discretion to allow further time for an entity to hold an ABN or provide notice to the commissioner of assessable income or supplies.
The ATO noted, however, that it will only review cases where all other eligibility criteria have been satisfied.
The Tax Institute’s senior advocate, Robyn Jacobson, said the ATO’s change in approach would potentially impact thousands of businesses who had been previously denied the COVID-19 stimulus payments.
“For clients who received a previous decision which declined to exercise the commissioner’s discretion, the commissioner will automatically review their circumstances and whether his discretion should be applied. The ATO will contact these taxpayers when they have completed their review or if further information is required,” Ms Jacobson said.
“There will be some taxpayers who never enrolled in JobKeeper, because they thought they were not eligible, or had sought advice and were advised that they were not eligible. These taxpayers will be able to contact the ATO for a review of their case.
“I would expect it would affect thousands of taxpayers.”