Audit Insurance... WTF

[dno]

Audit Insurance
Just received a letter from my Accountant asking me if i would like to opt out of this. The fee is $200 for $10.000 dollars cover. Anyone else pay for something similar ?

[Swogjb]

Audit Insurance
Just received a letter from my Accountant asking me if i would like to opt out of this. The fee is $200 for $10.000 dollars cover. Anyone else pay for something similar ?

My accountant was trying to sell it to me.
Told him to bash it.

[Disco EMU]

When I got asked to pay for Audit Insurance ... I realised it was time to find a new accountant!

[dno]

Yer I'm of the same opinion, The way it's worded is l have to apply to opt out...NICE . Have never herd of it before, something new every day , wonder how long before it's changed to an audit tax. That way we can all sleep well at night knowing that the Gov can poke there nose into your business and it's not going to cost you anything for the privilege.

[Bird]

The finance bloke on teh radio was talking about it a few weeks ago, and of course said its cheap insurance if you get audited... Not sure how much an accountant would cost you to go to the tax dept if your business got audited, but 200 could be about 1% of the fee.

I gave up on accountants when 2yrs in a row they phuqt my basic tax up and I got audited TWICE....

[dno]

I've got a good bloke doing the numbers but he is on a contract basis with the company. That's were the problem is, have asked him if we a can work out side the company and he's got to much to loose if he gets caught.  Might be time for a move.

[celibaterifle]

You can also opt to take Tax Investigation insurance (Audit insurance) with your business insurance if you have it. It's been round for a long time now, but looks like accountants are trying to get in on the action now.

[rotare]

If your tax is straight forward I wouldn't bother with it.  However if you have a business or investments it's cheap insurance IMO and lets me sleep at night knowing I'm covered if the ATD want to waste my accountants time checking or auditing my tax submission. You claim the cost back anyway the following year at tax time - kinda a no brainer.

[dno]

Thanks for the replies guys, if you get audited and have to pay the accountant for the paper work it's deductable also... so 50/50 l guess.

[albyback1]

how much would an audit cost that you would want to consider insuring against it?

I told my accountant to take a walk as if I get audited, the insurance only covers the audit, not the mistakes the audit discovers!

I was quoted $98.00 so I am not sure of how the scale of charges are calculated..... the acounting industry are now selling insurances, messing with superannuation, life cover and TPD..... Mine has stuffed up my TPD insurance to the tune of over $2,000.00 per year increase from last year!

I wish these people would just stick to what they are good at and leave the other issues to those experts... tax laws are complicated, industry super, life inurance and income protection, tpd and other insurance is also complicated (see general insurance topics raised here over the last few months alone). I am waiting for my doctor to see if I need amy fillings, and offer me a massage, wash my car AND offer me pet insurance whilst offereing me "fries with that"! Each topic has complications, lots of rules, lots of hidden issues which require a careful, planned and educated process of advice AND detailed disclosure..... incorrect disclosure will see you left high and dry when a clain for any of these products are attempted and further out of pocket.

If you ask me, an audit insurance is an affordable annoyance, the extra costs come into the equasion when mistakes are discovered. Thats when the accountancts professional indemnity insurance should cop a hit... just my opinion.

[dno]

 I hear ya.

[GLC]

when you consider that an Audit can run into several weeks, the ATO charges you for their time, whether you have been honest or not, and you need to cover the cost of your Accountant as well, it pays to tie in an Audit insurance with your business insurance just to be safe.  Why a PAYG would need Audit insurance I dont know.
if interested I can recommend a bloke who is switched on with insurance in general, not associated blah blah blah but he has done my insurances for business and had to even chase down pricing from places like Loyds as it was so darn expensive locally.

[medion]

I work for ************ insurance, and one of the covers we have is Tax Audit. It covers your accountancy fees, and legal fees in the event your business gets audited. It also covers the directors in the event they get audited personally.

When the ATO does the audits, they go throught the last 5-7 years, and get the accountant to re-report on all of the paperwork, not just reprint what they have already done.

Even if they find that all the paperwork was done properly, your accountant is still going to charge you for doing it all again.

It is only cheap, and the rate of audit done by the ato is rising.

[camdyson]

My professional insurance includes audit insurance. I've heard of audits of businesses similar to mine costing 10-20k so it's money well spent if it's sub $100.

If I could insure my car, worth about 20k, for $100 I'd jump at it!.....

Cheers,

Cam

[rotare]

When the ATO does the audits, they go throught the last 5-7 years, and get the accountant to re-report on all of the paperwork, not just reprint what they have already done.

Even if they find that all the paperwork was done properly, your accountant is still going to charge you for doing it all again.

It is only cheap, and the rate of audit done by the ato is rising.

That's exactly how it was sold to me.  Your accountant doesn't have to make a mistake for the ATO to make a query or just decide you fit in the category that needs auditing.  Again, for a couple hundred bucks it's cheap insurance.

[dno]

As a small sole trader, sub $75 and nill GST it's one of those extra pains that you don't really want. But as the thread has gone on it seems it may be $200 well spent. If only one had a crystal ball.
Thanks for the feed back guys.