Protect your clients with Tax Audit Insurance
As an insurance broker or accountant, offering tax audit insurance to your clients is crucial in the face of the Australian Tax Office’s intensified audit efforts. Learn how the Auditsave Tax Audit Insurance Policy can safeguard your clients and cover professional fees incurred during audits.
In today’s evolving financial landscape, the Australian Tax Office (ATO) is ramping up its audit activities. It has become imperative for general insurance brokers and accountants to protect their clients from potential audit-related expenses. This blog post explores the importance of tax audit insurance in the post-Covid-19 environment and highlights a comprehensive solution.
- The ATO’s increased audit focus
Post the Covid-19 pandemic, with the implementation of various government schemes and welfare initiatives, the ATO is preparing to conduct audits on a significant number of businesses and individuals. According to reports, up to 25% of taxpayers may be subject to an audit.
- Rising professional fees
Facing an audit can be a daunting and costly experience for individuals and businesses. Professional fees associated with audits can quickly escalate, leaving clients financially burdened. The ATO’s enhanced data-matching capabilities enable them to identify anomalies and potential breaches more efficiently than ever.
- Common audit triggers
It’s crucial to recognize that most individual tax returns contain at least one error. Common mistakes include inconsistencies in rental property deductions, work-related claims, self-managed super funds (SMSFs), and misreporting within the cash economy. As the ATO intensifies its efforts, the number of reviews, queries, investigations, and audits will substantially increase.
- Safeguarding clients with Tax Audit Insurance
To protect clients from unexpected expenses, general insurance brokers and accountants should partner with a reliable tax audit insurance provider. There are a range of Tax Audit policies available in the market. The AuditSave policy not only covers the cost of a tax audit but also extends coverage to SMSF Trustees. It is for potential penalties under Section 166 of the ACT, with up to $5,000 coverage (subject to policy terms and conditions).
- Understanding trustee penalties
SMSF Trustees can face penalties for various contraventions, including:
- Not keeping SMSF minutes for 10 years.
- Failure to keep records up to date.
- Failure to notify the ATO of any significant adverse effect on the Super Fund’s financial position.
- The Auditsave Tax Audit Policy goes beyond traditional coverage by protecting Trustees against potential penalties.
In light of the ATO’s increased audit efforts offering tax audit insurance is a wise decision brokers and accountants. By partnering with Auditsave, you can protect your clients from financial burdens associated with audits and safeguard your business reputation. Don’t wait until it’s too late—act now and ensure your clients are prepared for potential audits and penalties.
Remember, AuditSave Tax Audit Policy offers comprehensive coverage, not just for tax audits but also for SMSF Trustee penalties. By staying proactive and offering tax audit insurance, you can demonstrate your commitment to your client’s financial well-being and build lasting trust in your professional services.