It’s that time of year for the renewal of the Tax Audit Insurance and the renewal letters have been posted out …
If you haven’t received your insurance letter, please contact Anne at the office (email@example.com).
However we have fielded a few enquiries from client’s asking whether it is worth it or not. Here is our thoughts on it ..
IRD are very open as to their desire to conduct more audits now that the Government gave significant funds specifically to carry out more audits in the last budget. Their process now is to start with a review where they request certain standard information, review that and then make a decision whether a full audit is required. What you need to understand is, whether it’s a review or an audit, there is a process to follow and there are no shortcuts .. and it all takes time.
Here are a few examples .. GST Return review – IRD wanted copies of some tax invoices for some claims. We contacted the client, received the information, noticed that 1 of the invoices was not in the right name (click here for more on that), collated the information, sent to the auditor along with the disclosure of the wrong tax invoice, discussions with the auditor to allow the claim, follow up correspondence confirming action going forward, meeting with the client to discuss errors and corrections necessary, getting the GST refund released. An overall cost of $650+GST but Nil to the client as the insurer picked up the tab .. and the premium was $286!
So whether its GST, PAYE, income tax or any other tax type, we are seeing an increase in notifications from the IRD requesting reviews or further documentation. This is where the Tax Audit Insurance comes in. Any query large or small is covered by the tax audit insurance so it won’t cost you anything for us to deal with the IRD on your behalf. Like any insurance decision, you have to way up the cost of it versus the risk of not having it.
So if you were to have a review or audit and you would want us to deal with the IRD on your behalf, then we think the tax audit insurance is a no brainer. Other option .. run the guantlett!!