Audit Protection Insurance

What does this mean?

Audit Protection Insurance covers the professional fees incurred when an accountant assists a client to respond to an audit, review or investigation of tax returns lodged with the Australian Taxation Office (ATO). Audit Protection Insurance provides cost effective protection and peace of mind, again the substantial cost that may be incurred should the ATO select a lodged return for enquiry, review, investigation or audit.

What are random Tax and Government audits?

Audits, reviews and investigations are conducted by the Australian Tax Office (ATO) and other state and federal government agencies to ensure business and tax payer compliance with various tax and legislative requirements such as Income, Land and Payroll Tax, GST, FBT, Record Keeping, Workers Compensation, Employer Obligations, Superannuation Guarantee and Self Managed Superannuation Fund Compliance amongst others.

How likely am I to get a random audit, review or investigation?

The ATO, along with other federal and state agencies continue to announce significant increases in their audit activity. Now more than ever, Individuals, Businesses and Self Managed Superannuation Funds are at risk of being selected for a random audit or review.

Why do I need Audit Protection Insurance?

The ATO has again signalled that the work related expenses (WRE'S) are at the top of its audit list. The ATO claims it looks out for deductions that seem high or excessive compared with your income and claims that are "outside the regular pattern" for a particular job or industry, eg, teachers! If you purchased or sold an investment property in the past year, pocketed some of those resources stock profits or continued to take losses on that place you rent out, expect a letter from the ATO.

People who own shares or investment properties can generally expect to be targeted by the ATO this year. The ATO has issued the warning saying the boom in both stock market and the investment property market is largely to blame for the increased scrutiny.

Some of the common income tax deduction mistakes include:

Claiming the cost of carrying out initial repairs on faults that existed at the time of purchasing your investment property as immediate deductions.

Also, claiming renovation costs as deductions for repairs which are really capital improvements, such as remodelling bathrooms and kitchens and adding a deck or pergola.

Overstating interest deductions by including amounts related to private borrowings - interest on a loan taken off for both income producing and private purposes, such as the purchase of a rental property and a private motor vehicle, needs to be apportioned into deductible and non-deductible parts according to the amounts borrowed for the rental property and for the private purposes.

Not apportioning travel costs where a visit to inspect the rental property is combined with another purpose, such as a holiday.

What are the costs to businesses and tax payers in the event of a random audit, review or investigation?

If your business or individual return is subjected to a random audit, review or investigation, you are responsible for the costs (professional fees) involved in providing the required information. Even the simplest enquiry can require hours of work. In multiple years or multiple companies and trusts, thousands of dollars in accounting and legal fees can be incurred. The cost of being properly represented in these matters can be quite considerable depending on the length of time involved.

How can I protect myself from the costs of random audits, reviews and investigations?

We can offer you an Audit Protection Insurance which can provide you with comprehensive relief from these costs (fees). The Audit Protection Insurance provides for the payment of the professional fees incurred as a result of you being selected for an audit, review or investigation by the ATO or other Government body. The Audit Protection Insurance provides a fixed, cost effective solution to guard against these unbudgeted costs.

What Costs are covered?

The service covers all professional fees up to a prescribed limit (with no excess) when responding to, or representing you in an audit, review or investigation. These include not only our fees, but also legal fees, bookkeeping fees and specialist professional advisor fees (e.g. quantity surveyors, valuers, and actuaries).

Who is covered?

All of our clients can take advantage of the Audit Protection Insurance. Different levels of cover are available for:

Salary and wage earners,

Businesses or business groups,

Self Managed Superannuation Funds.

Is the Audit Protection Insurance compulsory?

We emphasize that there is no compulsion for you to purchase our Audit Protection Insurance, however we do recommend that you do participate in this offer as all our professional fees and costs in preparing the relevant documentation and responses on your behalf to the ATO and other related bodies will be covered under this program. These costs could be substantial given the numerous hours involved.

When does the service commence?

Should you wish to participate in the Audit Protection Insurance, your service will commence the next business day after we receive your payment, and expires on Expiry Date, which is the annual expiry date of the service.

What do I need to do to take up the Audit Protection Insurance?

Should you have any queries or wish to participate in the offer, please do not hesitate to contact our office on our toll free number on 1800 035 081 or email us at don't forget to also visit our website at