Taking the sting out of an ATO audit

The telephone rings, you answer and it’s your worst nightmare. No, it’s not your mother-in-law but the Australian Tax Office to let you know you have been randomly selected to be audited.

Even if your books are squeaky clean the thought of an audit makes anyone’s palms sweat. The emotional stress is enough to bear without the disruption to business, extra accountant fees and anyone else you need to engage to appease the ATO.

Tax Audit Insurance covers a business in the event that it receives a random audit from the Australian Tax Office. It covers the costs of professional fees incurred whilst preparing for the audit from accountants, lawyers, bookkeepers and any others advisors required, and other expenses incurred during the audit. Being audited can be both time consuming and costly for your business – you will most likely be asked to provide records and receipts of past transactions and you will almost certainly need the services of a qualified accountant.

The Australian Tax Office seems to be in a hiring frenzy, which means your chances of being audited are increasing. With the right Tax Audit Insurance in place, you can at least minimise the audit costs even if you can’t reduce the associated emotional stress!

Could this happen to you?

No-one ever knows when the ATO is going to strike and your business could be next on their hit list. If your business would not survive the financial and time costs of an audit then you should definitely consider Tax Audit Insurance.

Beat the build up

The construction industry was under review and a client’s small business was being audited. They were asked to supply 2 years of records. The client was cleared in this case and the insurer paid $8,500 for accountant fees.

Back to back BAS audit

The insured was a retailer with a turnover of around $2m and was asked to provide details substantiating BAS returns for two years. The cost of the investigation and preparation by the accountant was $3,400.