Don’t Get Caught Paying Huge ATO Audit Costs
Costs relating to the Australian Taxation Office’s (ATO) compliance initiatives continues to increase. In fact, in the last financial year, the ATO raised $15.6 billion (a 13% annual increase). To combat the costs of unplanned professional fees which can arise as a result of initiatives instigated by the ATO and other relevant government revenue agencies, we encourage all of our clients (and you) to take out audit insurance.
How likely is an ATO Audit?
In recent years there has been a significant increase in the audit activity undertaken by the ATO, and other agencies. The risk of an audit review for individuals, businesses and SMSFs continues to rise now more than ever before. In addition, the ATOs enhanced data-matching capability now facilitates a broader scope to target both businesses and individuals.
How much does an audit cost me?
You are responsible for the costs (professional fees) if your individual, business or SMSF return is subject to an ATO audit. If you do become subject to an audit, even simple queries can require hours or work, a full audit review could cost into the thousands of dollars.
How can I protect myself from the cost of an unexpected ATO audit?
Use an Audit Shield service, set up through your accounting and taxation adviser to protect yourself from an unforeseen and potentially massive audit bill. You’ll thank yourself later! Over the years we’ve had clients that have racked up audit bills in the 20-30K range as a result of forgetting or dismissing coverage.
What costs are covered?
Audit insurance covers the professional fees of your accounting and tax agent up to a prescribed limit when they represent you in an audit. The cover can also include the cost of legal fees, bookkeeping, and any specialist advisers you may need to engage (such as values and/or quality surveyors).
The benefits of Audit Shield service:
– Relief: In the event that you are subject to an audit, enquiry, investigation or review in relation to your lodged returns, the associated professional fees (up to a prescribed limit) are covered.
– Retrospective protection: Previously lodged returns are covered automatically.
– Simple claim process: In the event of a claim, we manage the process on your behalf.
– Reputable provider: The provider we work with at MVP Financial offers their services through more than 2,500 Australian accounting firms, approximately 200,000 businesses and individuals participate annually.
– You have a choice: The offering is optional, so there is no compulsion to participate.
What type of audits that are covered?
- Income Tax
- GST & BAS
- Fringe Benefits Tax
- Employer obligation audits
- Record keeping
- Capital Gains Tax
- Payroll Tax
- Workcover / Workers Compensation
- SMSFs (cover available separately)
I’m interested in learning more…
If you have questions about our Audit Shield service get in touch, we’re happy to answer all of your questions. Please call 9217 2400 or email us at email@example.com, alternatively, click on the link below.
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This article is provided as general advice only and does not consider your specific situation, objectives or needs. It does not represent advice upon which any person may act. Implementation and suitability requires a detailed analysis of your specific circumstances.