Is Audit Insurance right for your business? The ATO has received additional funding (several hundred million dollars) to undertake more audits this year. Each year, the ATO identifies specific occupations where it pays particular attention to claims for deductions and seeks to ensure that those people don’t try and claim deductions which they aren’t entitled to. This year, the careers which are getting specific attention are real estate workers, flight attendants, carpenters and joiners and earthmovers. Another area of focus will be people who make a living from eBay. Anyone who sells more than $20,000 worth of goods on eBay will automatically have their details forwarded to the ATO — so don’t assume you can keep that income “under the counter”.
Businesses are always under the spotlight and the ATO review your business to ensure it meets within their industry guidlines. If not, you will most likely be subject to some sort of ATO review.
Where you fall within a target category, you need to double-check your records to ensure that everything is in order as it is now more likely that they will be contacted by the ATO.
If your business, company, trust or individual return is subjected to “random” audit, review or investigation, you are responsible for the costs involved in providing the required information. The costs associated with an audit can start at a couple of thousand and range very high upwards of that. You can protect yourself against these costs by taking out Audit Insurance Cover.
PJT recommends having audit insurance; as it’s extremely likely that you will be audited at some stage. One of our clients was recently audited –the ATO started by looking at one BAS, which then grew to a review of their last 12 month's worth of BAS’s. There were no discrepancies and everything was in order, however it cost them over $5,000 in accounting fees. Luckily they had audit insurance, and didn’t have to pay anything – which came as a relief in a typically stressful time.
We recommend Audit Shield, which covers reviews, investigations, audits, and enquiries on the following:
- Income, Land and Payroll Tax
- BAS/GST Compliance
- Workers Compensation / WorkCover
- Superannuation Guarantee and Compliance
- Self Managed Superannuation Funds
- Record Keeping
- Research and Development Grants
- And many more!
If you are a client of PJT, you will receive a letter in the mail about this topic over the coming weeks. If you are not a client of PJT but would like to know more, please don’t hesitate to contact us on 5413 9300, or by email.
Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.