If you are a business owner, you can choose from different types of insurance coverage depending on what your business needs. An audit insurance for example, covers any investigation, enquiry, review or audit that the Australian Tax Office or other relevant government revenue agencies may instigate to ensure tax compliance.
Business owners can still be audited and incur fees even when they have ticked every box on a tax checklist due to the government’s increased audit activity alone. The ATO may review your tax return anytime, and while your deductions may be substantiated and the assessment could result to you not owing additional taxes, you may still incur steep fees for professional services related to the cost of an audit. With an audit insurance, you wouldn’t have to worry about such costs. Depending on the type of policy, the audit insurance could cover most, if not all, professional fees incurred related to a tax review.
An audit insurance policy can cover lodged returns, including employer obligations, capital gains tax, fringe benefits tax, superannuation guarantee, payroll tax and income tax, among others. However, it is advisable to discuss coverage options with your business tax accountant to explore and ensure the best options for your business. A tax accountant can help you work through auditing regulations whilst providing business tax advice, and formulate business tax planning strategies to reduce the chances of an audit.
Make sure that you review the full list of coverage as well as excluded items and possible scenarios, so that you can choose the best audit insurance available for your business. In doing so, you help protect your business from those unexpected expenses. Contact Sphere Accountants and Advisors today to see if an audit insurance is right for your business.