In the next few weeks we will be issuing our annual Tax Audit Insurance Premium renewal notices.
It is our view that the ATO will undertake significant audit activity in relation to the JobKeeper Payments once the payment period has reached a conclusion (i.e. post-March 2021). We also anticipate an increase in ATO audit activity as ATO auditors are redeployed from assisting in the rollout of stimulus measures back to audit activity.
Audits in respect of any government benefits or entitlements have always been an exclusion in most Tax Audit Insurance policies and certainly has been in Audit Shield. The logic behind this is that a Tax Audit insurance policy covers Tax Audits in respect of validating, substantiating, justifying, or supporting whether or not you owe more taxes or duties than you declared in a lodged return. Government benefits and entitlements, on the other hand, represent discretionary incentives being offered up by governments to encourage certain behaviour. They are not compulsory and not everyone is entitled to these, and the process involves an application process, and then a possible audit of the eligibility, entitlement, purpose, or use of that benefit or entitlement.
In 2020, the provider of our Tax Audit Insurance, Accountancy Insurance, in conjunction with the underwriter, Vero Insurance, put in place an endorsement to our policy which includes Job Keeper audits and reviews. This endorsement applied to all current and existing policies. This endorsement applies to all insurance renewals in the 2021 year. You do not need to do anything to have this endorsement added to your current policy or renewal policy. This endorsement has been added at no additional cost in premium.
Key features of this policy endorsement:
It only covers JobKeeper payments. All reviews or audits of other Covid-19 support packages are not covered unless they form part of an audit of a lodged return (i.e. BAS audit, Payroll Tax audit etc.). It only covers post-payment reviews or audits so any issues or queries with the JobKeeper application process are not covered. There is no additional premium cost associated with this endorsement. All existing policies have had this endorsement applied automatically. There is nothing clients need to do to trigger this endorsement.
For more information on the insurance coverage, download the Audit Shield Brochure here.
Director / CEO