Take a moment to read through a few of the thousands of claims that are processed using Audit Shield.
Australian taxpayers, in the form of businesses, individuals and Self Managed Superannuation Funds, are constantly finding themselves at the mercy of the Australian Tax Office (ATO) or other government revenue agencies in relation to audits, enquiries, investigations or reviews.
Employer Obligations Audit
An electrical contracting company recently had a 2 year audit in respect of PAYG & Superannuation obligations concentrating on payments to contractors which resulted in a number of contractors being deemed to be employees by the ATO.
Fees of $6,500 were fully covered by Audit Shield.
The West Australian office of State Revenue recently conducted a transfer duty investigation in respect of a business acquisition made by a company which resulted in an amount of duty being payable.
Fees of $3,680 were fully covered by Audit Shield.
GST & BAS
The ATO conduct many audits in respect to correct entitlements to fuel tax credits. We were proud to assist an Audit Shield client with a recent claim for a 3 year audit of a New South Wales business in the transport industry.
Fees of $21,237 were fully covered by Audit Shield with minimal adjustments made to the fuel tax credit entitlements.
The New South Wales Office of State Revenue recently conducted a payroll tax audit in respect of related party grouping rules and payments to contractors across 5 companies in the group which resulted in the grouping rules applying and payroll tax assessments being issued for the last 5 years.
Fees of $14,867 were fully covered by Audit Shield.
The ATO recently audited a restaurant business in Victoria in respect of compliance with superannuation guarantee obligations for the last 12 months and whilst a number of underpayments and late payments were found to exist.
A claim payment of $5,680 was made.
Payroll Tax Investigation
A Queensland based entity was selected in respect of whether or not the right amount of payroll tax was paid and whether grouping was relevant. All queries with regard to grouping were satisfactorily responded to but the client was still found to have slightly understated one contractor payment and some minor superannuation which resulted in the authority issuing an assessment of $1,553.
Fees of $8,801 were fully covered by Audit Shield.
Stamp Duty Enquiry
The matter was in respect of a Deed of Settlement which the OSR argued that it should have been subject to Stamp Duty for this Western Australia based Audit Shield participant. It was deemed that Stamp Duty should have been paid on the transaction and an assessment was issues for $13,490. Penalties were successfully argued down to nil.
Fees of $1,210 were fully covered by Audit Shield.
Income Tax (CGT) Review
A review of the use of CGT Small Business Concessions on a gain of around $5 million reduced down to around $450,000 was conducted on a Tasmanian based client.
After providing all the responses and obtaining legal advice to further validate the clients proposition, the outcome was that the ATO accepted the returns as lodged.
Fees of $9,625, including $1,671 of legal fees, were fully covered by Audit Shield.
Land Tax Audit
A New South Wales based client completed a questionnaire in regards to their land holdings to determine whether they were liable for Land Tax.
Their property was found not to be primary production land and the client was assessed for $4,300 worth of Land Tax.
Fees of $2,708 were fully covered by Audit Shield.
Retailer: GST Audit – No additional tax payable
A Melbourne retailer who was experiencing difficult trading conditions received a Goods and Services Tax audit. The financial cost of dealing with the ATO would have been a burden on the client. The outcome for the client was that the audit was dealt with at no cost to the business.
Fees of $6,800 were fully covered by Audit Shield.
Business Group: Tax Audit – Capital Gains Transaction
A group of businesses derived a capital gain. The ATO commenced lengthy audit action and support was able to be provided under Audit Shield for not only the firm’s assistance but also for legal assistance that was necessary for dealing with the ATO enquiry. The positive outcome for the client was that a robust and measured defence of the ATO claims could be made using the cover available.
Fees of $25,000+ were fully covered by Audit Shield.
Business Group: Employer Obligations Audit
A client was selected due to a data matching flag where the ATO believed the employees had claimed more PAYG withholding that the employer reported. Although the discrepancy was cleared, the client was found to have not paid the correct amount of superannuation and was assessed for $4,083 in Superannuation Guarantee Charge.
Fees of $7,374 were fully covered by Audit Shield.
Individual Taxpayer: Tax Audit Review – client 100% correct
An individual living in country Victoria was data matched by the ATO and certain work related and rental property deductions were questioned. Our tier 2 client firm provided professional assistance and all the ATO questions were resolved. The positive outcome for the client was that they were fully supported by us, the audit assistance professional fee was covered, and the ATO cleared the client.
Fees of $3,450 were fully covered by Audit Shield.
SMSF: Tax Audit Review – No cost for professional assistance
The ATO undertook a selective audit of a SMSF. This audit focused on the activities of the Trustee. The positive outcome for the client was that the total professional cost of dealing with the investigation questions and liaison with the ATO was covered.
Fees of $6,300 were fully covered by Audit Shield.
SMSF: Tax Audit Review – No cost for professional assistance
In relation to information provided in the regulatory section of the SMSF’s Income Tax Return, the ATO investigated rental income and expenses and member benefit payments over a two year period. The outcome was that the rental property was appropriately owned and accounted for. The member benefit payments had appropriate conditions of release.
Fees of $3,385 were fully covered by Audit Shield.
New Zealand taxpayers are constantly finding themselves at the mercy of Inland Revenue (IR) in relation to audits, enquiries, investigations or reviews.
Income Tax and GST compliance
Following a review of financial data obtained from banks, IR undertook a risk review, which subsequently progressed to an audit of a New Zealand based business in respect of Income Tax and GST compliance. IR considered that the income being declared was too low and the review and subsequent audit primarily focused on cash sales that may not have been correctly reported.
Fees of $6,780 were fully covered by Audit Shield.
Financial Services Business: Client Risk Review
IR initially undertook a Client Risk Review of an Auckland based financial services business. This was expanded into a Full Audit in respect of Income Tax and GST compliance issues related primarily to overseas transactions and property developments being undertaken over the past 3 years.
Fees of $17,850 were fully covered by Audit Shield.
Property Compliance Programme Review
As part of IR’s Property Compliance Programme, a Waikato based property developer was selected for an audit of 10 different entities, over 25 different property related transactions to ensure compliance with Income Tax and GST.
Fees of $20,000 were fully covered by Audit Shield.
Business Group: Income Tax, GST and PAYE Compliance Audit
Following a review of financial data obtained from banks, IR undertook an audit of a Christchurch based business group in respect of Income Tax, GST and PAYE compliance for the last 4 years.
IR considered that the net profit being declared was too low and the audit primarily focussed on cash sales that may not have been reported.
Fees of $9,280 were fully covered by Audit Shield.
Business Group: Income Tax Audit – Residency and Foreign Income
IR undertook an audit of a Napier based businessman and his related entities. Primarily the focus was on residency and foreign income from an income tax perspective. The taxpayer was deemed to have been a New Zealand resident which resulted in a significant taxation liability despite objections being lodged by the accountant.
Fees of $14,960 were fully covered by Audit Shield.
The Canada Revenue Agency (CRA) and other provincial revenue agencies are increasingly active in conducting audit activity in response to filed returns. Audit activity includes audits, enquiries, investigations and reviews.
As a result of data matching between Transport Canada and the (CRA) in respect of vehicles registered under a company name subsequently led to a Taxable Benefits review. This was a result of the company not including an amount for the GST in the value of the Taxable Benefits nor disclosing any employee contributions in their tax filings.
In the review some vehicles were found to be Taxable Benefits exempt however other vehicles were found to be non-compliant with the Taxable Benefits rules.
Professional fees of $8,945 were incurred, and fully covered by Audit Shield.
Corporation Post Assessing Review
A Calgary based entity was selected for a Corporation Post Assessing Review in relation to Professional Fees. All of the CRA queries were answered including providing them with the detailed list of transactions and a copy of invoices and receipts. Upon review, the CRA decided that no changes were needed.
Professional fees of $1,225 were incurred, and fully covered by Audit Shield.
Examination of GST/HST
Upon filing of the GST/HST Return, the CRA rang the accountant to advise them that they were reviewing the return prior to the refund being issued. A follow up letter was issued where the client was required to provide several documents including copies of invoices. The refund was eventually approved.
Professional fees of $1,495 were incurred, and fully covered by Audit Shield.
T1 Processing Review
After receiving their Notice of Assessment for their 2017 Individual Income Tax and Benefit Return (T1), the client received a letter from the CRA requesting more information about the medical expenses claimed. After providing the information to the CRA, they decided that no adjustment was necessary.
Professional fees of $945 were incurred, and fully covered by Audit Shield.
Trust Accountants Examination – Payroll
CRA arranged to visit the clients premises in Toronto to examine the books and records including payroll journals and list of subcontractors, bank statements and T4 slips. After the examination, the CRA requested further information and expanded the periods under review. This review continued over a 6 month period with adjustments of $4750 being made and payable by the client.
Professional fees of $3,550 were incurred, and fully covered by Audit Shield.
Without Audit Shield these cases would have resulted in the costs of the work being undertaken to be passed onto the individual, business or SMSF* in question or the accounting firm would have had to sustain the costs.
Audit activity can be costly.
Don’t risk it!
*SMSF cover is available in Australia only