Protect your clients during tax season!
According to data from the ATO, around 96% of small businesses engage a tax professional to help operate their business. Accountants, bookkeepers, and other tax practitioners are trusted by the SMEs they serve. In the event of an ATO audit, your services may be even more important to them.
ATO audits at a glance
While regular auditing activity was put on hold during 2020, the ATO stopped granting small businesses blanket extensions for audit cases from 1 September 2020. That means some small business owners may soon get a call to confirm their tax filing.
Tax audits are a critical part of ATO’s activity, as evidenced by the most recent stats available:
The ATO undertook 120,000 audits of small businesses during the 2017-18 financial year.
These audits related to almost every area of tax filing: “omitted income, PAYGW discrepancy events, incorrect and incomplete obligation reporting (this may extend to GST obligations), non-lodgement, employer obligations and mistakes as a result of business structures."
Pausing normal activity due to COVID-19 decreased audit yield by $2.3 billion—with $9.5 billion total collected during 2019-20 compared to $11.8 billion in 2018-19.3
While the ATO acknowledges that the shadow economy (and businesses operating entirely outside of the tax system) has the biggest impact on the tax gap, small business owners wanting to do the right thing still contribute to these figures. This is most often due to mistakes, confusion over their obligations, or poor record keeping.
Tax Audit Insurance: What your clients should know
Careful record keeping and engaging the services of a tax professional could help many small businesses avoid audits. However, there may be clients who come to you too late, have not kept thorough records, or made an honest mistake.
Regardless of why a business is being audited, Tax Audit insurance could help your SME clients avoid some of the costs associated with this often-expensive process.
If a small business’ accounts are audited by the Australian Tax Office, they may need to hire external accountants to assist in the process. Tax Audit Insurance covers a business for specified costs in responding to an official tax audit. *
Tax Audit insurance helps shield a small business’ finances from some of the major costs associated with an ATO audit. As a tax professional, it also helps ensure that you will be paid for the services you perform during the auditing process.
A Tax Audit insurance policy typically includes: *
Accountants’ fees
Tax agent fees
The following are typically not covered by Tax Audit insurance: *
Refer your small business clients & earn
Tax Audit insurance could help protect your small business clients from large expenses as the ATO continues to resume its normal audit activity. As a trusted SME service provider, you can add further value to your clients by referring them to BizCover for their small business insurance needs, including Tax Audit insurance.
Equip your clients with the right cover this tax season. They can get $50 off the cost of their Tax Audit insurance when they use the code AUDIT50 at checkout now through 31 July 2021, and you’ll earn a commission on every policy they purchase.
This offer is ONLY available to clients referred to us through the portal, so please ensure you use your lead form or link found in the 'New Lead' tab to send the lead to us, or the sale might not be tracked!
As always, if you have any questions feel free to reach out to partnerships@bizcover.com.au and we'd be happy to assist!
