Audit Insurance - Why we recommend it

Posted on 29 Jan 2021

The word 'audit' is one that business owners don't want to hear when operating a business, especially when it involves the IRD. Unfortunately, it is something that a few of you may encounter.? The Inland Revenue may do an enquiry on your business if they don't need to go further into an audit process.? Just this simple enquiry can require hours of work, resulting in high costs to you. Introducing Audit Shield. Audit Shield is an insurance which provides for the payment of professional fees incurred in the event you are selected for an audit, enquiry, an investigation, or review instigated by Inland Revenue (IR). Monteck Carter endorses Audit Shield and the insurance means that you can be covered for accounting costs, should the IRD put you under the microscope. Any query raised by or received from IRD about a return or a client's tax status can be considered an enquiry.? If work is involved by professionals, including your accountant, then this would be covered under your Audit Insurance policy.

IRD Audit Activity

IRD have focus on areas such as aggressive tax planning, high-wealth and high-income individuals and land transactions? More recently they have been putting a lot of effort into the 'hidden economy' which is a headline item on the IRD's website.? With more and more information being shared between government departments, banks, and other organisations, IRD have a much greater ability to analyse and query certain transactions? As an example, we are finding that they are now coming to us with transactions that are affected by the Brightline test prior to these tax returns even being lodged.

What is covered?

All professional fees up to a prescribed limit (with no excess) are covered when you engage us in audit activity matters. Our fees, in addition to legal fees, bookkeeping fees and other specialist professional advisor fees required to assist us in our responses are covered. Income Tax, Risk Reviews, GST, PAYE, Fringe Benefits Tax and Resident Withholding Tax are just a few items which are included in the Audit Shield coverage.

How Audit Shield can benefit your business

• Covers the professional fees normally charged when are required to respond to eligible official enquiries, reviews, investigations, or audits, of lodged returns.
• Specialist fees are included. This includes tax experts, lawyers, or other specialists that we might need to engage on your behalf in relation to an opinion or defence.
• Your commonly owned legal entities and typically most shareholders are covered under one single annual fee.
• Payment is tax-deductible if you are in business or self-employed.
• The cover is retrospective. Therefore, the cost of all eligible audits, enquiries, investigations, and reviews of your lodged returns, irrespective of which year they were lodged, or by whom they were lodged, are included.

Is it right for you?

All clients can take advantage of our Audit Shield Master Policy. Anyone can be targeted, even if your lodgements are accurate. It is not a reflection on the quality of work from you or by Monteck Carter. With this in mind, we offer you the opportunity to protect yourself. A separate letter will be sent to all our clients on this insurance. Contact one of our team today to further discuss Audit Shield for your business.