Dear FCFG Network
We have another First Class Accounts Media Alert going out into local newspapers.
They are prepared by our PR company Ignite PR & Marketing Pty Ltd, and are designed to increase brand awareness in your local area. Please See Following.
Tax audits leave small business exposed to financial risk
Small business operators are unwittingly exposing their businesses to huge financial risk by not taking out tax audit insurance, according to the head of Australia’s largest bookkeeping franchise.
Research conducted by First Class Accounts with small business owners across Australia, found 45 percent of business owners didn’t have audit insurance and another 48 percent had never even heard of it.
Clive Barrett, Executive Chairman of First Class Accounts, said that for just a few hundred dollars, small to medium enterprises (SME) could potentially save tens of thousands of dollars in the event they’re audited by the Australian Taxation Office (ATO).
“The ATO is increasing the number of audits they conduct every year,” Mr Barrett said “Unlike in the past, the businesses they’re auditing are chosen at random. There’s no longer a focus on size, structure or industry. You can never be sure who will the targeted next.”
Mr Barrett said of the businesses researched that had been audited, 51 percent paid in excess of $3000- $5000 in the process.
“Most small business would not have a spare $5000 to throw away on being audited but costs are incurred because of the additional accounting, bookkeeping and legal costs associated with an audit. For many small business this could lead to substantial financial hardship.
“On the flip side the cost of tax audit insurance usually only amounts to a few hundred dollars and when you compare this to the thousands of dollars it could cost to engage accounts, bookkeepers and lawyers, tax audit insurance starts to make sound economic sense.”
Mr Barrett said he was surprised and worried by the large number of SME operators who were not aware that tax audit insurance was available and affordable.
“Unfortunately, there is a misconception amongst small business owners that the tax office only target big business so they don’t have to worry but that is just not the case anymore. It is worrying that close to 50 percent of small business people don’t know about a simple solution to protect themselves.
Mr Barrett said he encouraged small business owners to look into audit insurance and weigh up the risks of ignoring it.
“We have over 180 franchises throughout the country specialising in SMEs,” Mr Barrett said. “Our franchisees are local people with local knowledge, and as small business operators themselves, they understand the things that are important to their clients.”
Along with tax audit insurance, First Class Accounts can also help small business operators with professional indemnity insurance and general business insurance.
“We understand that small business operators are busy people which is why we’ve introduced insurance into our service mix,” Mr Barrett said. “We’re making it simpler and easier for our clients to keep their business’s financial future on track.”