How an Audit Shield Insurance Policy Reduces Audit Costs

In the past few months alone, the Australian Taxation Office (ATO) has been working hard on online businesses and influencers after doubling down on its efforts to collect dues.


Although Australia has built itself upon an image of a no-nonsense approach in terms of legal and financial obligations, recent times have seen a sharp rise in audit activities. Seeing that more and more businesses are opening up shop and staking their claim in their respective industries on the Internet, the ATO essentially has more reasons to audit.


While it may be a necessity in the eyes of the law as it deters erring practices and financial irresponsibility, being audited is also seen as a bothersome task for many business owners.


This is primarily because audits don’t only raise some eyebrows for those in your industry, but they also take up your valuable time as authorities will implore you to maintain full attention when it comes to compliance. It is for this reason that many businesses seek to avoid being flagged for a review or tax audit by the ATO. However, this dream is nearly inevitable, given the rise in audit activity.


It is now vital for e-commerce businesses and influencers to protect their operations if they’re subject to review. As more influencers, e-commerce businesses, and self-managed superannuation funds continue to face the risk of inconvenient audits, many of these entities are now seeking a solution that will provide them excellent protection in the long run.


Among all the different tools, tips, and tricks that can be used to protect a company from any arising complications or inconveniences during an audit, there’s one solution that’s worth considering: Audit Shield Insurance.


What is an audit shield insurance?


Audit shield insurance is a type of policy that provides the payment of professional fees and other pertinent costs incurred when a business is subject to the following:

  • Tax audits

  • Inquiries

  • Tax investigations

  • Reviews


Throughout these processes, your business must undergo several hours of work at the very least in cooperation, which can lead to high costs for adequate representation. Some audits or reviews, however, may last up to months at a time and merit even more extensive costs that may cut your profits and put your financial performance at risk.

What does it cover?


With an audit shield insurance policy, on average, a standard $2,500 coverage is used on all review activity-related matters. Throughout an inspection, keep in mind that your company must shell out a significant amount of money for legal fees, bookkeeping fees, and relevant specialist professional advisor fees, all of which can be settled by an insurance policy. In terms of specific types of inspections covered, here are a few common situations where this coverage would best apply:

  • Income tax audits

  • GST, BAS, and Superannuation Guarantee Audits

  • FBT Audits

  • Payroll and Land Tax Audit

  • WorkCover and PAYG Withholding Audits

  • Self-Managed Superannuation Funds (SMSF) Audits


Conclusion


As the Australian e-commerce business industry continues to grow beyond expectations, both online companies and influencers alike face increasing risks of being audited, effectively risking valuable time and money in the process. Fortunately, having an audit shield insurance policy will outfit your company with the protection it needs to recover any incurred costs during a review!


When it comes to having an accountant for e-commerce businesses, there’s no need to look any further because we’ve got you covered with our top-notch services. With our help, you will be able to minimise taxes and increase profits – get in touch with us today!

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