The Australian Taxation Office (ATO) and other government revenue agencies continue to be allocated an ever-increasing amount of the federal budget. And so, it is unsurprising to learn that taxpayers – be they businesses, individuals, or Self-Managed Superannuation Funds (SMSFs) – are more likely than ever to become subject to official audits, enquiries, investigations, or reviews.
In response to this rising audit activity being instigated by governmental bodies, demand for audit insurance packages able to provide financial coverage for these (what tend to be expensive, drawn-out) inquests has been accelerating.
More Australians are showing a willingness to incur a fixed, tax-deductible payment to their audit insurer, rather than risk self-funding the oft-exorbitant financial cost of dealing with the ATO.
Audit Insurance Explained
The provision of audit insurance services captures the payment of professional fees incurred in the event that an individual’s lodged tax returns become subject to an audit, enquiry, investigation, or review by a government body such as the ATO.
Whilst many initially believe audit insurance sounds extremely narrow in its applicability, it takes little reading to be proven otherwise. Consider the following examples where owning audit insurance would prove beneficial:
An Oft-Misunderstood Service
There exist certain opinions about audit insurance that unfortunately continue to be borne out of misinformation, particularly the following:
Whether you are a Melbourne-based manufacturing business, an SMSF, or an individual, audit insurance will be beneficial to you when the time comes that the ATO want to stick their nose in and see what’s going on in your tax affairs. With the increased funding to the tax department in recent years, and the improvement in data-matching technology, the likelihood of this happening to you is as great as it has ever been.