Audit Shield (ATO audit insurance)

Does anyone have this insurance and do you think it's worth it?
My accountant keeps sending me notices to sign up or else sign a form to decline the offer. It costs $220 per year to cover 5 individuals and is tax deductible.

Apparently if I get an audit by the ATO, this policy will cover any fees directly related to the audit up to $10k. More info about the policy here:

http://intacc.com.au/tax-government-audit-shield/
 
I've been getting those notices for about 15 years now. IMO not worth it.

It's like the server at the fast food joint who asks you if you want a drink and fries. There's a good bit of profit for the extra "service".
 
It really depends on if your tax returns have anything in them that is likely to trigger an ATO audit at some stage. Currently the ATO is performing risk reviews of high net worth individauls (over 30 mil wealth?) If the review finds any points of note an audit will follow.

Well worth it in this case to have the audit insurance. If you do not have many large or out of the ordinary transactions and you lodge on time them the risk of an audit is unlikely.

Ta
 
They'd only be sure that somebody was a policy holder if they did an audit.

it was tongue in cheek but actually a good idea. Am sure the ATO could access that data and it would give them a pretty good hit list of high risk taxpayers. Plus the ones that get hit but are in the clear suffer no loss, so nobody gets hurt
 
My accountant keeps sending me notices to sign up or else sign a form to decline the offer.

You do not need to sign anything to decline the 'offer' if you don't want it.

Just tell your accountant to stop pestering you.

They will persist because they are on a commission.
 
I looking into the merits for clients and I'm not convinced. Basically the insurance is a policy taken out by the accounting firm. The clients pay the premium and are covered by that policy. In the event of a claims event the FIRM IS PAID its fees to do your extra work.

Its covers all enquiries even land tax, gst, etc. However it does NOT cover any penalties etc. It merely pays the professional fees.

Factors I disliked:
- Its a requirement I must market it to all clients. The policy intent isn't client by client. I think that's a bit non arms length.
- The insurance encourages over billing as it removes the incentive to keep costs low.
- It is marketed on fear.
- It doesn't cover the "risk"events"... It just insures the accounting firms fee base and the client funds a premium that pays unexpected fees.
- Its not a portable policy. It ties to client to the firm that holds the policy. That's very restrictive and a shackle in my view.

Its is cheap and might be worth considering but avoid purchase based on fear. Just because a taxing agency makes an enquiry should not mean high costs. Perhaps a policy for those with complex affairs that may contain risks that may take extensive time to address. (ie Hybrid trusts, payroll tax issues, interstate businesses, international affairs etc)
 
You do not need to sign anything to decline the 'offer' if you don't want it.

Just tell your accountant to stop pestering you.

They will persist because they are on a commission.

The insurer offers to handle the marketing as part of the deal. I would ask if your privacy has been compromised. The firm may have refused and do their own mailouts.
 
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