Novak Djokovic and Rafael Nadal put out of business by ATO's unforced error
Done it: Novak Djokovic celebrates winning the Wimbledon title against Roger Federer. Photo: Jonathan Brady
Tennis champions Novak Djokovic and Rafael Nadal along with thousands of other sole traders and small business have fallen victim to an overzealous push by the Tax Office to clean up its registers.
The two tennis stars were stripped of their Australian business numbers, Tax Office insiders say, as the ATO moved to rid its registers of what it believed were more than 1 million unused ABNs.
Rafael Nadal and more than 24,000 other ABN holders were still using their registrations, or intended to use them again, when they were booted off the register. Photo: AP
But Rafa, Novak and more than 24,000 other ABN holders were still using their registrations, or intended to use them again, when they were booted off the register.
The ATO says the cancellations were the result of systems functioning "normally" but insiders say the process was botched with the Tax Office, beset bydeep cuts to its workforce, moving too quickly to replace discarded public servants with automated systems.
Sources close to the office say a massive backlog has developed of individuals and businesses waiting to be issued with ABNs with the Tax Office conceding there are more than 17,000 applications currently outstanding.
The two tennis champs were among a number of high profile sports people, who compete periodically in Australia, to be affected by the mix-up, tax insiders say.But the ATO, which has also been under fire after its online tax return system failed to cope with the recent end-of-financial-year rush, says it is meeting its targets for issuing ABNs and ABRs with 93 per cent processed on time.
"This has come about because the organisation is trying, poorly, to automate processes due to budget and staff cuts," one source told Fairfax Media.
"Someone didn't figure that there are non-resident clients who only lodge business activity statements statements every now and then.
"The sports people along with plenty of others were picked up with the sweep.
"ABR processing is a big mess."
An ATO spokesman said the ATO's systems did not specifically identify a taxpayer as an international sports star and would not confirm that Djokovic and Nadal had been booted off the register.
"We do not specifically identify high profile sportspersons so are not able to comment on that group in particular," he said.
But the spokesman confirmed the office of the business registrar, which operates out of the ATO, did undertake periodic sweeps to remove unused numbers and registrations "to ensure the integrity of the register".
"This program identifies registrants that have not shown any signs of business activity in the last four years, such as not declaring any business income," he said.
"These registrations are normally cancelled.
"These registrations may be cancelled automatically on the basis of information available to the registrar.
"In 2014-2015 this program of work cancelled 1.2 million redundant registrations.
"To date approximately two per cent of these have been reinstated on the spot at the request of the ABN holder."
The spokesman defended the office's record of handling applications for ABNs.
"The ATO is meeting the service standard of 93 per cent of ABN registrations processed within 20 business days," he said.
"We registered more than 700,000 ABNs in 2014-2015.
"Currently there are 17,644 ABN applications in the system."
The two players' managers did not respond to requests for comment.