We offer tax audit insurance to all our clients every year. This means our clients are covered for any Australian Taxation Office (ATO) or Office of State Revenue (OSR) audits or investigations. In our experience responding to audits can be very time consuming and therefore costly, not to mention stressful and tiring. We advocate taking out tax audit insurance and do this ourselves. As you can see from the graph that they kindly supplied to us detailing 2020-2021 audit insurance claims. This shows the main current audit targets are BAS, Income Tax, Employer obligations, Covid-19-ATO JobKeeper Payment Audits, and Payroll Tax (all states).
Recently we had an ATO audit for a client that just kept continuing into new areas. We realised that it was time to call in a tax lawyer as the potential costs of an adverse decision could run to $60,000 or more. In the end, our client spent a fraction of this amount resolving the issues with our help and the tax lawyer we were able to engage on their behalf. In this instance, the client was not covered by audit insurance, but they have opted to take it out now due to the lessons they have learnt from this.
Our Primarius policy is through Accountancy Insurance - click here for more information. You may find a tax audit policy through your business broker, and we don't mind which you choose, we just recommend that you ensure you are covered.