I am the sole wage earner. Do I need Audit Shield Insurance?
Yes, we strongly recommend coverage. Audit Shield protects you in the event of an audit by the ATO. Individual taxpayers with significant work-related deductions are increasingly being scrutinised. The policy also covers your spouse under the same arrangement.
Can you pay the renewal from my Super Fund if the Insured Party is under the Super Fund name?
Yes, payment can be arranged from your Super Fund on your behalf. This will be processed before the renewal deadline of 31 August.
Can you include my spouse and Family Trust?
Yes, coverage can be extended to include all of your associated entities as a group under one arrangement.
Will there be any issues if I get audited by the ATO?
While an audit does not necessarily indicate wrongdoing, it may still require a response and supporting documentation. Audit Shield covers the cost of our time and services to manage communications and liaise with the ATO or any other relevant authority on your behalf.
I can only pay the invoices for Audit Shield Service once I receive my refund from the ATO.
Not a problem, however, please note that coverage only begins once payment has been received. If your payment is made after 31 August, there will be a period of time when you are not covered.
Do we need to purchase insurance for the SMSF since it is already subject to an independent audit?
Yes. Although SMSFs undergo an independent annual audit, the ATO can still initiate its own audits, investigations, or reviews.
A Superfund has to be covered separately under its own.
There are numerous compliance issues related to the risk, return, and liquidity of the funds’ investments that need to be fully addressed. One minor issue could draw attention from the ATO, placing the SMSF under scrutiny, and this is where Audit Shield will cover any related costs.
Can you clarify what the covered fees are? Is this related to AustAsia fees for audit support?
Audit Shield provides insurance cover for the cost of professional fees, such as ours, in the event you are contacted by the ATO or other revenue-related government body for a review or audit, including accounting, legal, bookkeeping, and specialist advisor fees.
The audit insurance covers reviews for both current and prior year lodgments, including, but not limited to, Income Tax, GST, BAS, Superannuation, PAYG, FBT, Payroll Tax, Land Tax, Stamp Duty, WorkCover, SMSFs, and JobKeeper-related audits.
Is Audit Shield worthwhile?
If the ATO comes back and asks a question about the deductibility of wages or the calculation of capital gain, this can require time-consuming responses. Audit Shield ensures the associated professional costs are covered if such queries arise.
Lastly, it isn’t just AustAsia Fees. Audit Shield covers the professional fees incurred in responding to an audit, enquiry, investigation, or review—this includes not only our time, but also fees from any third-party professionals we may need to engage.
Could you provide me with an idea (percentage-wise) of how many clients have been audited by the ATO in the last two years?
Approximately 5% of clients were audited by the ATO in the last two years.
The ATO has increased its use of data matching and benchmarking, and can audit up to four years’ worth of data.
Audit Shield insurance covers the cost of our time to gather the necessary information for presentation to the ATO, should they choose to conduct an audit. To justify the correct legal position to the ATO can cost up to $ 5,000.
I am confident that I have recorded my tax paperwork in an organised and legal way. I’m also confident that the AustAsia team have also acted on our behalf in the same manner.
Is it acceptable to assume the audit risk rather than paying more for insurance?
You are right; we always act in an organised and legal manner for our clients. However, be aware that the ATO can target anyone for an audit, even if their lodgements are accurate. The ATO is increasing their data matching and uses benchmarks to target their audits, and has also increased their response to fraud for individuals and business owners.
While you may feel secure in your compliance, audits can happen even when everything is done correctly. The insurance provides peace of mind, covers previous years’ returns, and is tax-deductible. While coverage is optional, we encourage you to assess the benefits based on your personal circumstances.
