When you are in charge of a growing business, you need to keep your wits about you. While you must try to keep ahead of your competition, you must also identify and fix any weaknesses that you may have and be prepared to head off any threats before they materialise. In this case, your business insurance broker may be one of your best friends, but you should always ask them if you are properly covered.
After all, there are a variety of different policies available, and you may be surprised what level of coverage you can get to minimise your exposure in some unusual areas. Take taxation, for example. Did you know that you can get coverage that protects you against an audit?
Are You Vulnerable?
As you may know, the ATO has wide-ranging powers and seems to get even stronger and more invasive as the years go by. They are on the lookout for tax evasion and underpayment and from time to time will focus on small to medium enterprises like yours. If you're around for some time, then by the law of averages it's likely that you will come under the spotlight of the taxman.
What's Involved in a Tax Audit?
If you get that dreaded letter through the post, you may have to deal with an ATO field audit, and this may be an extensive investigation. They may seek information about your business but may also look at how you manage superannuation funds and can in certain circumstances look at the individual tax returns of the directors, as well. As you can imagine, this can place a considerable workload on the desk of your accountant and take your attention away from other pressing matters.
Variety of Coverage
Tax probe insurance is a product that can help to protect you from the additional costs needed to defend your position. This will include the professional fees of your accountant and solicitor while an investigation is taking place. You can also choose additional coverage to protect each director in case their own tax return comes under scrutiny and further optional coverage, should the ATO insist on an audit of self-managed superannuation funds.
Sometimes, this kind of investigation may involve travel and accommodation costs, particularly if you have a remote location and this becomes the centre of attention for the authorities. In this case, tax audit insurance can meet these expenses too.
Have a word with your insurance broker so that you can sign up for tax audit insurance. Don't forget to ask them if there is anything else you should consider, as well.