Audit Shield Service
Costs relating to the Australian Taxation Office’s (“ATO”) compliance initiatives continue to increase. In fact, in the 2017/18 financial year the ATO raised $16.9 billion (an 8% annual increase). The Australian Taxation Office now has unprecedented access to data matching that makes it simpler and far more likely that they will pursue previously untargeted taxpayers.
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 are pleased to offer you our Audit Shield service.
The Audit Shield service provides for the payment of our professional fees otherwise payable by you when incurred as a result of our accounting firm being required to respond, on your behalf, to an audit, enquiry, investigation or review (audit activity) instigated by the Australian Taxation Office (ATO) or other Australian Government revenue agencies.
Benefits of the Audit Shield service:
Data matching becomes more sophisticated each year. This makes it simpler and far more likely for previously untargeted taxpayers to encounter audit activity, despite compliancy.
With the Audit Shield service, you can rest assured knowing that our professional fees will be covered, and the accounting and taxation work will be undertaken, in relation to the audit activity. Often these fees can be greater than those we may charge you for completing the return(s).
- Relief: If 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.
- You have a choice: The offering is optional, so there is no compulsion to participate.
What is included under the Audit Shield service?
Professional fees otherwise payable to us that have been incurred in responding to audit activity until the completion of the matter, or until the cover limit as stated on your Client Acceptance Form is exhausted, will be covered under the Audit Shield service.
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.
Both during (interim payments) and/or upon conclusion of the audit activity, we will present for payment our fees on your behalf to the insurer for recovery against the policy. Should a difference arise between our fees and the amount available to be covered against the policy, we may need to seek the shortfall payment of our fees from you.
Your cover begins from the next business day after our receipt of your participation fee.
Will my professional fees be covered?
Yes. Costs (professional fees) which are directly related to the work we are required to undertake as a result of audit activity will ordinarily be covered (up to the prescribed cover limit).
The cost of these additional fees can be considerable depending on the amount of time required to attend to the audit activity. Standard fees associated with any typical compliance or other work conducted throughout the year are excluded.
What audits, enquiries, investigations and reviews are covered?
- Capital Gains Tax
- Employer Obligations
- Fringe Benefits Tax
- Income Tax
- Land Tax
- Payroll Tax
- R & D Tax Incentive (ATO Only)
- Record Keeping
- SMSFs (cover available separately)
- Stamp Duty
- Superannuation Guarantee
- WorkCover/Workers Compensation
- Plus much more
What is not included?
We have carefully selected our Audit Shield policy to provide the widest possible coverage for us and our clients. However, we do remind our clients that such items or circumstances as listed below are not covered:
- Actions in regard to any notices from the ATO or any other government revenue agency that are educational or advisory in nature or merely suggest, invite or propose actions to be taken by you; or act as a warning to you that you may be selected for audit activity at a future time; or do not compel you to take any action.
- If the ATO auditor imposes final culpability/shortfall penalties of 75% or more, and/or the return is deemed to have been fraudulently lodged.
- Any matter in relation to applications, assessments or reviews of government benefits or entitlements and any form of activity involving a review relevant to you maintaining industry status, licence compliance, membership or any form of application, registration or re-registration process.
- Any fine or penalties imposed or for any amounts payable pursuant to an amended notice of assessment or adjustment including but not limited to any additional tax, duty, government impost or similar payments.
- Costs for work incurred which should have been undertaken prior to the audit activity (e.g. outstanding lodgements).
- Audit activity where notification was given prior to the inception of cover (i.e. prior to our receipt of your participation fee).
Is the cost tax deductible?
Yes. A tax deduction should ordinarily be claimable for your participation fees.
Important information about the Audit Shield service:
We hold a tax audit insurance policy in our business name. By proceeding with our Audit Shield service, we will include you and your entities in our policy. The policy we hold is a group policy underwritten by AAI Limited (trading as Vero Insurance).
You can continue to benefit from the service on the proviso that we are acting as your registered tax agent.
Participation in this service is not automatic. Protection will commence on the next business day after we have received your payment.
Liability limited by a Scheme approved under Professional Standards Legislation.