S & L Consulting Pty Ltd and Commissioner of Taxation (Taxation)

S & L Consulting Pty Ltd (the taxpayer) sought to recover amounts paid to it under the Cash Flow Boost scheme from the Commissioner of Taxation. The dispute centred on whether the taxpayer was eligible for these payments, which depended on whether it was required to withhold Pay-As-You-Go (PAYG) amounts from payments made to a contractor. The Administrative Appeals Tribunal (AAT) was required to determine this eligibility.

The primary legal issue before the AAT was whether the taxpayer had an obligation to withhold PAYG amounts from payments made to its contractor. This obligation, in turn, depended on whether a valid voluntary withholding agreement, in the approved form, had been entered into between the taxpayer and the contractor. The AAT also considered whether an agreement to withhold a nil PAYG amount, or an agreement to withhold at a rate not contemplated by the legislation, constituted a valid agreement for the purposes of the Cash Flow Boost eligibility.

The AAT reasoned that the obligation to withhold PAYG amounts from payments to a contractor only arises if the taxpayer and the contractor have entered into a voluntary withholding agreement in the approved form prescribed by the Commissioner. In this instance, the taxpayer had not withheld any PAYG amounts from payments to the contractor. The AAT found that no agreement to withhold PAYG amounts had been entered into, and even if an agreement had been attempted, it was not in the approved form. Consequently, the taxpayer was not obliged to withhold PAYG amounts and was therefore ineligible for the Cash Flow Boost. The AAT affirmed the Commissioner's decision.