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Small business litigation funding

Support for self-represented clients in the Small Business Taxation Division of the Administrative Appeals Tribunal.

Last updated 23 June 2024

Where you are self-represented in the Small Business Taxation Division of the Administrative Appeals Tribunal (SBTD AAT), and the ATO engages external legal representation, the ATO will cover reasonable costs to engage an equivalent level of legal representation to act on your behalf in the SBTD AAT.

If you are eligible for small business litigation funding and accept our offer, you will be given a letter of agreement containing the terms for funding. You and a representative of the ATO will need to sign the letter of agreement for small business litigation funding to commence.

After signing the agreement, you will need to provide us with:

  • an estimate of the costs of legal representation you expect to incur for the SBTD AAT proceedings, within 30 days of the date of the agreement
  • an updated estimate if the costs of legal representation are likely to exceed the original estimate which is to be provided as soon as practicable.

Small business litigation funding is provided only to pay your reasonable costs for legal representation which we determine by reference to the Federal Court Rules 2011External Link.

Reasonable legal costs

Solicitor’s fees

The reasonable costs of your solicitor will be paid even if the ATO only engages counsel. Small business litigation funding for work undertaken by a solicitor, such as attendances, preparing of documents and reading, is capped at the amounts set out in the Federal Court Rules 2011.

We will also pay other reasonable costs relating to your solicitor by reference to the Federal Court Rules 2011.

These costs may include:

  • more than one lawyer where it is appropriate
  • research of a legal question that is not procedural in nature
  • electronic document management
  • masking documents
  • collation, pagination and indexing
  • copying documents
  • disbursements
  • out-of-pocket or expert witness expenses.

To establish that these costs are reasonable we may require further information from you or your legal representative. We may also require further information on legal costs not specifically provided for in the Federal Court Rules 2011.

Counsel’s fees

Funding for work of counsel retained by you is calculated by reference to the equivalent number of counsel (junior or senior) retained by the Commissioner. For example, if the Commissioner retains one senior counsel and one junior counsel and you engage the same the level of counsel, you will be funded for one senior counsel and one junior counsel.

For counsel rates, funding is capped at a rate under the most recent National Guide to Counsel FeesExternal Link published by the Federal Court of Australia.

Costs not covered by small business litigation funding

Under the Federal Court Rules 2011, the rates specified for preparing documents include costs for typing, printing, posting, faxing, emailing and other administrative tasks relating to preparing or sending documents.

Examples of other costs that may not be considered reasonable and therefore may not be covered under funding include:

  • administration of the funding, such as  
    • preparing, negotiating or executing the Letter of Agreement
    • preparing invoices or bill of costs, and any information or documents required to accompany invoices or bill of costs
    • preparing any other communications with the Commissioner on issues arising out of the funding
  • time spent providing instructions or directions to administrative staff
  • administrative work, such as  
    • typing
    • booking airline flights
    • booking taxis or ride-sharing services
    • recording details of the time spent on legal work
    • paying disbursements
    • any other work that is customarily performed by a legal or other secretary, accounting or legal support person
  • services for which funding has already been provided
  • expenses relating to any work done after the SBTD AAT proceedings have concluded
  • expenses relating to the commencement and conduct of any appeal from the decision in the SBTD AAT proceedings.

While we would not ordinarily fund these types of expenses, if you consider a cost is reasonable and ought to be funded, you should request the Commissioner’s written agreement to fund the expense prior to incurring the cost.


Where you are registered for GST and entitled to claim an input tax credit on the costs of your legal representatives, we will not pay the GST included in this cost. You will need to pay the GST amount directly to your legal representative.

If you are not registered for GST or not entitled to an input tax credit on the costs of your legal representative, small business litigation funding under this agreement will include any GST payable on your reasonable costs.

How to claim

After executing the Letter of Agreement you can commence submitting invoices from your legal representatives for small business litigation funding. The invoices must be sent by:

The invoice from your legal representative must contain the following information:

  • a description of the work undertaken on each task or item
  • the date the work was performed
  • the amount of time spent on each task
  • the name of the person who undertook each task, their position and their hourly rate or amount payable under the Federal Court Rules 2011.

Where an invoice does not contain sufficient information, we will work with you and your legal representative to obtain the relevant information.


We will pay small business litigation funding directly on your behalf to your legal representative. We will tell you the amount of funding to be paid and this amount will be paid within 30 days of us receiving the invoices and any additional information that we require.

If we do not pay an amount, we will contact you to discuss our reasons for non-payment. We will also provide our reasons in writing.


If you do not agree with our reasons and believe we have not dealt with your claim in line with our agreement, contact us first to see if the dispute can be resolved.

If you still disagree with our decision, you can refer the disagreement to the Inspector-General of Taxation and Taxation OmbudsmanExternal Link. For a dispute about the payment of your costs under this agreement, we will comply with any recommendation made by the Inspector-General of Taxation and Taxation Ombudsman.

More information

For more information, related Practice Statements and relevant legislative references, see:

Contact us

For more information about small business litigation funding:

  • phone 13 28 69 between 8.00am and 5.00pm Monday to Friday and ask for the Test Case Litigation Program
  • email the ATO Litigation Funding mailbox at
  • write to:

    Small Business Litigation Funding
    Australian Taxation Office
    GPO Box 4889
    Sydney  NSW  2001

If you do not speak English well and need help from the ATO, phone the Translating and Interpreting Service on 13 14 50.

If you are deaf or have a hearing or speech impairment, phone us through the National Relay Service (NRS) on the numbers listed below:

  • TTY users, phone 13 36 77 and ask for the ATO number you need
  • Speak and Listen (speech-to-speech relay) users, phone 1300 555 727 and ask for the ATO number you need
  • internet relay users, connect to the NRSExternal Link and ask for the ATO number you need.