For those clients that have needed to make claims on their Audit Insurance, it has proven to be a good safety net to meet unexpected costs. These are the costs that occur for work that needs to be done to prepare documents necessary for a Government audit (ATO, Revenue NSW etc). A lot of time can be spent liaising with the ATO or Revenue NSW (payroll audits) on our client’s behalf.
Accountancy Insurance have just released some of their recent claim statistics that throw a light on the areas the government has been taking a closer look at. For the financial year ending June 2020, the four most frequent claim types were to reimburse for professional fees as a result of audits for:-
- Employer obligations audits and reviews
- BAS audits and reviews
- Payroll tax investigations
- Income tax audits and reviews
In continuing with this theme, Employer Obligation audits and reviews were the highest claim category in December 2020.
Employer Obligation audits and reviews (PAYG/SG/FBT): Data captured from Single Touch Payroll (STP) continues to become more detailed and sophisticated which feeds increased information to the ATO. This is a significant contributing factor as to why claims in this area so prevalent. Furthermore, very few employers will have used the Superannuation Guarantee (SG) amnesty, and many may have fallen behind on their SG obligations because of COVID-19 business cash flow pressures.
JobKeeper payment audits and reviews: The ATO has historically been very active in reviewing government benefit schemes. With so many Australian employers enrolled in JobKeeper, it is nothing short of a certainty that ATO audit activity will increase in 2021.
Cash flow boost payment – activity statement audits and reviews: The ATO will continue its checks to ensure that cash flow boost payments reached those employers that were entitled to the payments and whilst the program drew to a close with the lodgement of 30 September 2020 activity statements, we still expect to see ongoing audit activity in 2021.
If you have any concerns on these matters or would like some more information on Audit Insurance please contact John Kalachian or Henry Zhao at Fortis Accounting Partners.