The scope and frequency of random audits are increasing. The most frequent reviews are conducted by the Australian Tax Office (ATO) however state governments and other agencies also participate.
Audits can affect any business and are not targeted at our clients specifically. Businesses of any size can be scrutinised by various agencies, however business entities with turnover of $3-$6 million are three times more likely to be audited. The cost of responding to audits is also rising, with average fees exceeding $7,000 per review.
Tax & Government Audit Insurance can help protect your business.
Tax & Government Audit Insurance covers accounting fees incurred in the course of an audit or investigation by the ATO, or any other government agency. It can also include the cost of specialists, such as a tax expert or lawyer, if required for an opinion or defense.
The policy, underwritten by CGU Insurance Limited, covers these costs (up to a prescribed limit) for audits, review or investigations relating to the current year’s returns, and prior years.
How likely am I to get a random government audit or investigation?
Random audits and Investigations aren’t just carried out by the ATO. Many state and federal government agencies conduct audits covering matters such as:
- Income Tax, Bas, GST, FBT
- Capital Gains
- SMSF Compliance
- Super Guarantee
- Centrelink, Child Support
- Employment Conditions
- Work Related Expenses
- Payroll Tax, Land Tax, Stamp Duty
- Workers Compensation
What are the costs to my business of random government audits and investigations?
If your business of individual return is subject to a random audit, review or investigation, you are responsible for the costs involved in providing the information required. Even a simple enquiry can require hours of work by your accountant to respond effectively – even if your records are up to date and you have done nothing wrong.
If you get audited you need the best help available to minimise the risk of the investigation becoming extended, stressful and time-consuming. In some cases, specialist accountants and lawyers could be involved and, as a result, your business could face large expenses that impact your cash flow.
How can I protect myself from or my business from these unexpected costs?
Tax and Government Audit Insurance allows you to cover your business for the cost of professional fees incurred in audits and reviews. It is designed to be affordable for small to medium sized businesses.
If you receive an enquiry from a government agency such as the ATO, you simply pass the enquiry or audit to your accountant and they manage the process on your behalf, dealing with relevant agencies.
You claim your accountant’s fees from CGU, who reimburse you direct. You get help when you need it the most – and your costs are covered.
Alternatively, contact our office and we can organise a quote for you.Share