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25 Mar 2021 Member Advocacy

Cash flow boost — response by Senior Advocate, Robyn Jacobson, CTA

A member recently sought assistance on behalf of their client who was denied the cash flow boost due to an inability to evidence business activity before 12 March 2020.

The business was started in the form of a partnership in 2018. In 2019, it was decided the business would restructure from a partnership to a company for commercial reasons. The company was incorporated in October 2019. It was intended the business transition from the partnership to the company around November or December 2019, but timing was such that this ended up not eventuating until 1 February 2020.

The company reports GST on a quarterly basis. Its first sales were made in February 2020 and were reported in the March 2020 quarterly BAS. The company opened its bank account on 16 December 2019.

Following the ATO denying the cash flow boost, the company sought a review, but the ATO confirmed the company was not eligible for the cash flow boost.

Following the release of the Inspector-General of Taxation and Taxation Ombudsman’s A Report on aspects of the Australian Taxation Office’s administration of JobKeeper and Boosting Cash Flow Payments for new businesses on 21 December 2020 — which identified an alternative eligibility pathway for certain businesses (in very limited circumstances) for JobKeeper (business participants) and the cash flow boost — the member sought our assistance.

The Tax Institute took the matter to the ATO. The ATO advised us that they would arrange for someone in the cash flow boost team to contact the member.

The member recently provided this feedback:

I wanted to let you know that we have just been advised that our client was found to be eligible for the cash flow boost. A fantastic outcome!

This outcome would not have been possible but for The Tax Institute’s article on the IGTO report, your guidance and assistance in putting our client's case in front of the right eyes at the ATO. For this, both our client and myself are enormously grateful.

Cash flow boost — response by Senior Advocate, Robyn Jacobson, CTA

A member recently sought assistance on behalf of their client who was denied the cash flow boost due to an inability to evidence business activity before 12 March 2020.

The company was incorporated in 2019 and opened a bank account in September 2019. A Nil BAS was lodged for the December 2019 quarter. GST on sales was first reported in the BAS for the March 2020 quarter.

Following the ATO denying the cash flow boost, the company sought a review, but the ATO confirmed the company was not eligible for the cash flow boost. The taxpayer objected and the ATO disallowed the objection.

Following the release of the Inspector-General of Taxation and Taxation Ombudsman’s A Report on aspects of the Australian Taxation Office’s administration of JobKeeper and Boosting Cash Flow Payments for new businesses on 21 December 2020 — which identified an alternative eligibility pathway for certain businesses (in very limited circumstances) for JobKeeper (business participants) and the cash flow boost — the member sought our assistance.

The Tax Institute took the matter to the ATO. The ATO advised us that they would arrange for someone in the cash flow boost team to contact the member.

The member recently provided this feedback:

The ATO has confirmed that, based on further evidence provided on behalf of our client, the cash flow boost will be allowed. Thanks again for your help — nice to have a win and our client is very happy.

Cash flow boost — response by Senior Advocate, Robyn Jacobson, CTA

A member recently sought assistance on behalf of their client who was denied the cash flow boost due to an inability to evidence business activity before 12 March 2020.

The company registered for an ABN and opened a bank account in September 2019. It settled the purchase of a café business in November 2019. A BAS for the December 2019 quarter was lodged in February 2020 disclosing GST on purchases for the café business but nil sales, as December was spent setting up the café premises. GST on sales was first reported in the BAS for the March 2020 quarter which was lodged in May 2020.

Following the ATO denying the cash flow boost, the company sought a review, but the ATO confirmed the company was not eligible for the cash flow boost.

Following the release of the Inspector-General of Taxation and Taxation Ombudsman’s A Report on aspects of the Australian Taxation Office’s administration of JobKeeper and Boosting Cash Flow Payments for new businesses on 21 December 2020 — which identified an alternative eligibility pathway for certain businesses (in very limited circumstances) for JobKeeper (business participants) and the cash flow boost — the member sought our assistance.

The Tax Institute took the matter to the ATO. The ATO advised us that they would arrange for someone in the cash flow boost team to contact the member.

The member recently provided this feedback:

I advise that the ATO has determined that our small business client is eligible for the cash flow boost of $20K under the additional grounds. This has been a great result for our client operating a small café business during very difficult times, and one that we considered was unreasonably missing out on assistance.

Thank you very much for your assistance with escalating this matter with the ATO. Hopefully we have assisted one more small business to survive and prosper going forward.

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