Late in December 2021, the AAT decided that the operator of a small gardening business was not entitled to JobKeeper because he got he reregistered for an ABN on 5 Feb 2020 (before 12 march 2020, per r11(6)) had not made a taxable supply as required by r11(8) – for the quarter ended 21 Dec 2019 (the last quarter that applied to him, that ended before 12 March 2020).
The facts were these.
- Mr Yazdani was a self-employed gardener.
- He originally obtained an ABN in November 2018 but it was cancelled a month later when he advised the Australian Business Register that he was no longer carrying on a business.
- On 6 February 2020, he obtained another ABN in respect of his gardening activities, which commenced on 5 February 2020.
- Two weeks later Mr Yazdani was registered for GST, reporting quarterly, although before lodging his first quarterly BAS he changed to annual reporting.
- On 10 September 2020, Mr Yazdani lodged both his annual BAS and his income tax return for 2019-20.
- In the BAS he declared $35,483 in total sales and in his tax return he declared $32,438 in total business income.
- In the meantime, on 1 September 2020, he applied for JobKeeper as a business participant for the period 1 August to 31 August 2020.
- The ATO rejected his application.
The AAT agreed with the ATO that Mr Yazdani was not entitled to JobKeeper. This was because, in terms of s 11(8) of the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 [Federal Register of Legislation – F2020L00419], he had not “made a taxable supply in a tax period that applied to [him]” – Namely: one that ended before 12 March 2020 – see Rule extracted below.
Whilst Mr Yazdani had an ABN prior to 12 March 2020 (as required in r11(6)) – viz: 5 Feb 2020, when his business recommenced, he did not make a ‘taxable supply’ prior to that, namely in the tax period required by r11(8)(a)(ii).
- This was the last tax period that applied to Mr Yazdani, which “ended before 12 March 2020” and was was the quarter ended 31 December 2019 (relevant for when he reported quarterly) or the financial year ended 30 June 2019 (relevant for when he reported annually).
- He had not made a taxable supply in either of those tax periods (because they were both prior to him having commenced business).
JobKeeper Rules
11 Entity’s entitlement to jobkeeper payment for a business participant
(1) An entity is entitled to a jobkeeper payment for an individual for a fortnight if:
(a) …
Integrity rule
(6) An entity is not entitled to a jobkeeper payment under this section unless the entity had an ABN on 12 March 2020 (or a later time allowed by the Commissioner), and the requirement in subsection (7) or (8) is satisfied.
(8) For the purposes of subsection (6), the requirement in this subsection is satisfied if:
(a) the entity made a taxable supply in a tax period that applied to it that:
(i) started on or after 1 July 2018; and
(ii) ended before 12 March 2020; and
(b) the Commissioner had notice …
(Yazdani and FCT [2021] AATA 4814, AAT, Kirk SM, 23 December 2021.) [LTN 1, 5/1/22]
[Tax Month – January 2022 – Previous 2021] 11.1.22