You’ve worked hard to build your business and you want to make sure that it stays profitable. A tax audit could cost you tens of thousands of dollars in fees and penalties, not to mention the time spent on dealing with the Australian Tax Office (ATO). Tax Investigation Insurance can help mitigate these costs by providing you with money to pay for an audit if one occurs.
Minimise your costs in the event of an audit
What’s more, you have the peace of mind that comes from knowing that your Tax Investigation Insurance provider will negotiate with the Australian Tax Office (ATO) on your behalf. That way, you won’t have to stress about being stuck in an unfamiliar situation and dealing with an uncomfortable amount of red tape.
Insurance companies provide this service for a small additional fee because it’s ultimately good for business. It helps them to keep their clients happy and loyal—and it also ensures that their investors remain contented! This means more money flowing into businesses and less money flowing out of businesses.
Dealing with an Australian Tax Office (ATO) Audit
When you get a letter from the Australian Tax Office (ATO), you should respond immediately. You should also contact your accountant and ask him or her to help you prepare your response.
This is because the auditor will be looking for details in your response that may not be included in your accountants records. The auditor may also want more information than was requested in the original audit letter.
In some cases, if there are missteps on either side of an audit—whether it’s a misunderstanding between client and accountant or an unintentional error made by the Australian Tax Office (ATO)—the situation can be resolved without additional penalties or interest charges being assessed (although these scenarios are rare).
However, it’s important to note that when dealing with an audit, whether personal or business related: don’t panic; always respond promptly; follow all instructions given by auditors; do not lie under any circumstances; and remember that while we can’t control what happens during an audit process (or how long it takes), we can certainly help lessen any unpleasant surprises along the way by working together as partners throughout this trying time!
If your business has been audited in the past or is expecting a large deduction for travel costs, it may make sense to purchase tax audit insurance. The policy covers the cost of an audit and any penalties or interest that result from an audit.
The policies also cover situations where you’re required to pay back taxes because of internal errors. For example, if you accidentally classify personal expenses as business expenses and are audited for this reason, the policy will cover those costs as well—any fines that result from reclassifying the expenses are not covered by Tax Investigation Insurance.
The most important thing to remember is that tax audit insurance is not something you want to buy, but rather something you need to buy. Having this protection in place will allow you to sleep easy at night knowing that your business’s finances are protected in the event of an Australian Tax Office (ATO) investigation.
