Over the past few months there has been an increase in audit/review activity initiated by the ATO, State Revenue Office & WorkCover, as both State and Federal Governments attempt to tighten up budget deficits.
With government revenue authorities increasingly using data matching, artificial intelligence, and even social media, they can compare disclosures made in your lodged tax returns to those of other taxpayers or benchmarks. If a data matching check escalates to an official audit, inquiry, investigation, or review, our costs in defending your position can accumulate quickly, regardless of whether any adjustments are made to your returns.
Audit Insurance will cover our accounting (or other professional fees) you incur as a result of needing support during an audit or investigation. It does not cover any fines or penalties you might receive, however it does cover all of our time to prepare responses and information to the relevant authority on your behalf to help mitigate the audit/review.
An ‘audit’ is very broadly defined as any matter from a basic phone inquiry to a complete audit of lodged returns with the ATO and other government revenue authorities; and extends to you engaging relevant specialists such as tax lawyers, if required.
What are the benefits of Audit Insurance?
- Comprehensive Cover: Audits and reviews of Employer Obligations (PAYG/FBT/SG), Income Tax and GST are just some of the areas the ATO are targeting.
- Retrospective protection: Previously lodged returns are covered automatically.
- Specialist fees: In addition to our fees, fees of any other external specialist (e.g. taxation lawyers) or relevant consultant engaged or instructed by us to assist us in a response to audit activity are also covered.
- You have a choice: The offering is optional, so there is no compulsion to participate.
What does Audit Insurance cover?
Audit insurance can cover audits, inquiries, investigations, reviews or examinations relating to the following*:Income Tax
- BAS and GST
- Fringe Benefits Tax
- Capital Gains Tax
- Superannuation Compliance
- Superannuation Guarantee
- Payroll Tax
- R & D (ATO only)
- Plus much more
* Subject to terms and conditions of the policy
|A||Salary and Wage Earner (inc. Shares & Rental Properties)||$10,000||$100|
|B||Salary and Wage Earner with Partner (inc. Shares & Rental Properties)||$10,000||$165|
|C||Self Managed Super Fund||$10,000||$320|
|D||Sole Trader/Partnership/ Non Trading Trust < $500k turnover||$10,000||$225|
|E||Business Group < $500k turnover||$10,000||$320|
|F||Business Group/Salary-Wage Earner $500k - $1m turnover||$10,000||$425|
|G||Business Group/Salary-Wage Earner $1m - $3m turnover||$20,000||$660|
|H||Business Group/Salary-Wage Earner $3m - $6m turnover||$20,000||$850|
|I||Business Group/Salary-Wage Earner $6m - $10m turnover||$20,000||$1,030|
|J||Business Group/Salary-Wage Earner $10m - $25m turnover||$30,000||$1,470|
|K||Business Group/Salary-Wage Earner $25m - $50m turnover||$35,000||$1,800|
|L||Business Group/Salary-Wage Earner $50m - $75m turnover||$35,000||$2,975|
|M||Business Group/Salary-Wage Earner $75m - $100m turnover||$50,000||$4,560|
Note: All figures quoted above are inclusive of GST, Stamp Duty and Admin Fee.
What steps next?
Due to an overwhelming positive response to our recent survey, STM Accounting Group will now be taking out an audit insurance policy, that
any of our clients can subscribe to.
Over the coming weeks, we will be sending out individual letters to all clients, so you can choose to opt into the policy if you wish. When we send out the letter it will include a list of entities covered by your policy, our recommended policy (based on the estimated rates above) along with a tax invoice that you can simply pay in order to activate your cover.