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. Even worse, it’s the Australian Tax Office letting you know that you’ve been randomly selected to be audited.

Even if the books are squeaky clean, the thought of an audit makes anyone’s palms sweat. On top of the emotional stress, you’ll need to cope with a disruption to the business and the cost of extra accountants and bookkeepers,  as well as any other professionals 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 advisers 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 is increasingly focusing on tax evasion and compliance, which means an audit is becoming more and more likely. 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!

Get the cover that is right for you

With BizCover you can choose a policy with cover between $10k and $50k.

The length of time an audit takes to complete obviously impacts the cost, so think about how much your accountant charges and any costs incurred in terms of gathering documents and evidence, like the cost of a valuer, etc. If your business has multiple entities then you need to consider that all of these may be audited at the same time – which will take more time and effort!

Tax audit insurance benefits

If you’re running a business and filing tax returns then you seriously need to consider Tax Audit Insurance.

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.