It’s that time of year again, and many of your small business clients will be clambering through your doors to ensure their business is in order come tax time. But no matter how well versed in tax accounting you are, audits or reviews of your client’s tax returns are sometimes unavoidable.
This is where Tax Audit insurance comes in, as it covers a business for specified costs in responding to an official tax audit by the ATO or state tax authority. By referring Tax Audit cover to your clients, not only will you be helping protect their businesses from future risk, but you could earn a commission through the BizCover Client Referral Portal.
Read on to find out how.
Doing Your Due Diligence
Small businesses are often a target for tax audits, with businesses between $1 million and $3 million in turnover the most likely group to be affected1. And after a couple of years of relaxed conditions, the ATO has pledged that extra, tighter controls will be implemented to reduce fraud attempts.
From BAS audits and JobKeeper payment reviews to payroll tax investigations, a tax audit can come seemingly out of nowhere for your client and they may need to hire a professional to help them with the process.
As you probably know, your client is not going to be thrilled with this cost, which can run into the thousands depending on the length and severity of the review.
Making your clients aware of this risk and providing an option designed to protect them from it may improve your credibility with your customer. If an audit were to arise, you would’ve done your due diligence and likely improve your relationship rather than leaving your client with a nasty surprise that their likely to blame you for.
The Tax Audit Radar
Now many accountants may be saying their clients have no need for Tax Audit insurance. You are extra careful when preparing your clients’ tax returns and the ATO has no reason to look over your clients’ books.
We hear you.
But while you may think your clients are off the tax audit radar, many ATO and state authority audits occur before the accountant is involved.
Instead of having a thankful small business owner that is getting covered for the audit through their insurance policy, you will be left gathering information for the investigation while your stressed-out client thinks of ways to fork out thousands.
That’s not the basis for a strong, long-lasting relationship. But what could be is for the accountant to give the option to the client to cover themselves just in case they end up on the ATO’s radar.
Benefits for Accountants and Bookkeepers
While sorting out your small business client’s Tax Audit policy may save them money if a claim were to arise, it could also create an additional revenue stream for yourself.
The BizCover Referral Portal gives you the opportunity to refer your small business clients to get Tax Audit insurance (or other types of policies) through BizCover.
You just need to submit your leads and from there it’s simple to track their progress and your commission. And best of all it’s not a one-off commission. You receive a commission each year the policy renews. Or, if you prefer, you can choose to pass on your commission as a discount to your client.
Tax Audit cover is usually a section within a Business Insurance (BizPack) policy – an insurance package designed to provide cover for your business contents, stock, tools, and commercial premises when an insured event occurs (such as fire, storm, theft, or even accidental damage).
That means you could get a commission for multiple products depending on your client’s needs. But if it’s just Tax Audit insurance they’re after, it can also be purchased individually by specific insurers.
Tax time can often be the busiest period of the year for accountants and bookkeepers. Helping your clients be protected from the risk of a tax audit during this time will likely help build your reputation as well as provide you with an extra income stream.
To sign up to become a BizCover referral partner and refer Tax Audit insurance and other business insurance products to us, click here.
*This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording. © 2022 BizCover Pty Limited, all rights reserved. ABN 68 127 707 975; AFSL 501769
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