Increased number of reviews
The importance of audit insurance in the wake of the Federal Budget – did you know that you can get insurance that covers the costs of professional fees incurred to respond to an ATO audit?
The recently announced Federal Budget 2023 has unveiled significant funding increases ($588M) in the government’s stance towards tax compliance, particularly through the Australian Taxation Office (ATO). GST compliance,and Personal income tax deductions have been specifically named by the government as areas of risk.
If you are in business, audit insurance is an often-overlooked component of business insurance, however in an environment where compliance scrutiny is intensifying, having audit insurance serves as a proactive measure to safeguard one’s financial interests.
Extended audit scope
Even if you are not in business, you may be a high-income earner, or have investment properties, the scope for an ATO review is much greater than in the past. You should be aware of safeguarding your financial well-being and know that you are not immune to tax compliance scrutiny (and review).
As complexities within our tax system increase, the time and expertise required to respond effectively to ATO reviews also escalate, resulting in more costs to simply respond to the review, not including ongoing management of the ‘case’ to completion. The potential cost of such services is increasing, with accountants needing to spend many hours (at hourly rates) to address detailed audit correspondence and liaise with clients.
Audit insurance offers coverage for professional fees incurred in responding to ATO and other government department reviews.
Investing in audit insurance ensures that individuals are also financially prepared to handle these reviews without incurring a significant cost burden.
With a substantial allocation of government funding towards tax compliance, the ATO aims to enhance its ability to address emerging risks and generate additional revenue. In light of these developments, it becomes increasingly crucial for businesses and many other taxpayers to consider the importance of audit insurance as a protective measure.