As part of the October 2022 Federal Budget, the Government announced a significant funding boost to extend the ATO’s major compliance programs. This includes additional funds for the Shadow Economy Program and the Tax Avoidance Taskforce of around $1.8 billion (combined) and makes it clear that the ATO has moved into an aggressive compliance mode.
In addition, the government will extend the ATO’s existing Shadow Economy Program for a further three years from 1 July 2023. This measure will allow the ATO to continue its crackdown on businesses operating outside the tax system and is estimated to increase receipts by around $2.1 billion over four years from 2022/23.
These measures strongly indicate that the ATO’s audit coverage of taxpayers will escalate over the next three or four years.
The purpose of offering Audit Cover to our clients is to provide you with peace of mind that if you receive an audit and have paid our annual audit cover fee then you will incur no further costs for our time.
Our annual audit fee is tax deductible. You can claim a tax deduction for the cost of the service each year when we prepare your Income Tax Return.
This service is being provided based on client demand and is open to all clients. It is entirely up to you if you wish to participate in this offer.
If you would like to participate in our annual Audit Cover program, please click on the ‘Purchase Audit Cover’ button below and follow the prompts.
We will issue you with an invoice for Audit Cover. Upon receipt of your payment, you will be covered for any ATO audit conducted between that date and your next anniversary date.
If you have any queries about our Audit Cover offer, please do not hesitate to contact us.
Connect Audit cover provides you with the peace of mind that in the event of an ATO audit, you can engage our services to act on your behalf at no additional cost. We will liaise with the ATO on your behalf and utilise our experience in dealing with the ATO to assist you to navigate through the audit process.
|
Audit Cover Fees inclusive of GST (at June 2023) |
Annual Fee |
|
Individual Tax Clients |
$ 66 |
|
Individuals with Rental Properties |
$110 |
|
Sole Trader operating a business (Not registered for GST) |
$143 |
|
Sole Trader operating a business (GST registered business) |
$198 |
|
Partnerships (includes associated individuals) |
$264 |
|
Companies (includes associated individuals) |
$374 |
|
Trusts (includes associated individuals) |
$374 |
|
Multiple entities (e.g. company + Trust or Partnership + Trust) |
$594 |
|
Additional Fee for High Risk Clients |
$143 |
If we consider you to be a high-risk client we will discuss this with you before invoicing you for cover. This discussion will explain why we categorize you this way and give you the opportunity to work with us to reduce your risk rating in the future.
Feedback from our clients. We have received many requests for Audit Cover. Most accounting firms offer some form of Audit Cover for their clients. By offering Audit Cover to our clients we are providing you with the peace of mind that if you receive an audit you will incur no further accounting fees for our time in assisting with the audit. We will assist you through the audit and try to obtain the best possible outcome for you based on our years of experience dealing with ATO.
As part of the October 2022 Federal Budget, the Government announced a significant funding boost to extend the ATO’s major compliance programs. This includes additional funds for the Shadow Economy Program and the Tax Avoidance Taskforce of around $1.8 billion (combined) and makes it clear that the ATO has moved into an aggressive compliance mode.
The ATO’s audit detection armoury includes various tools, such as third-party data matching and benchmarking of information provided in tax returns and activity statements. These and other audit tools have become very sophisticated over the past decade, allowing the ATO to be more accurate with its selection of businesses for review or audit.
Although our time requirements to assist Individual non-business clients is less than the time required for a business audit, we still think it is important to consider cover. For the 2023 income year, the ATO will continue to increase its compliance activities in relation to individual taxpayers, as it attempts to reduce the tax gap for individuals not in business, which was estimated to be just over $9 billion for 2019/20 (being the latest statistics available).
The ATO is continuing to focus on work-related deductions and substantiation of deductions. The ATO is comparing claims of certain occupations against the average claims lodged. Rental properties also continue to be an area of increased audit activity.
In recent years, the ATO has significantly increased its audit focus on rental properties, following an increasing number of errors identified by the ATO concerning rental income and deductions. In particular, the ATO’s Random Enquiry Program has found that 90% of tax returns that reported rental income and deductions contained at least one error, even though most of those property owners were assisted by a registered tax agent. As a result, the ATO has become increasingly concerned about landlords omitting rental income and overclaiming rental deductions.
Unfortunately, you can have the best records and the most honest tax return, but this will not protect you from the risk of receiving an audit. The time that can be involved in the Audit can still amount to a lot of money, even if the outcome is in your favour. With our experience, we can help identify areas of concern and assist in rectifying the issue or ensuring early disclosure to mitigate against fines and penalties.
We will cover all types of ATO audits including reviews, desk audits, personal living expenses questionnaires, GST audits, FBT audits etc. Unlike some accounting firms we will not limit the scope of ATO audit that we cover, nor will we limit our time and cover amount.