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Tax audit insurance: help with the cost of an ATO audit
An ATO audit or review can take a lot of an accountant's time, and that time costs money even when your return was right. Ross Accounting offers audit insurance through Accountancy Insurance's Audit Shield, which can cover the professional fees of responding to an eligible audit, up to the limit of cover.
In short
Ross Accounting offers its clients tax audit insurance through Audit Shield, a policy from Accountancy Insurance. Audit Shield covers the professional fees an accountant would normally charge to help a client respond to an eligible audit, review, inquiry or investigation by the ATO or another government revenue authority, such as a state revenue office. Accountancy Insurance says the policy has no excess and covers audits of earlier returns, as long as the audit starts during the period of cover. Limits, terms, conditions and exclusions apply.
Who it is for
- Individual clients who would like help with the professional fees of an ATO review or audit
- Business clients facing BAS, income tax, employer obligation or state tax audits
- Self-managed super fund clients
Why an audit costs money even when you have done nothing wrong
Australia's tax system works on self-assessment. The ATO generally accepts the figures in a return when it processes it, then may check them later. It does this partly through data matching: the ATO says it receives data from third parties, including banks, financial institutions and other government agencies, and uses it for education and compliance work.
A check can be as small as a manual review before a return is finalised. The ATO's return status page shows this as "Under review", and the ATO contacts you if it needs more information. A check can also be a full audit of income tax, GST, fringe benefits tax or employer obligations, or a payroll tax or land tax audit by a state revenue office.
Either way, someone has to gather records, explain the figures and deal with the ATO for you. That is professional time, and it is billed whether or not the audit finds anything. Audit insurance is designed to pay for that time.
What Audit Shield covers
Audit Shield is tax audit insurance from Accountancy Insurance, a company established in 2003 that specialises in tax audit insurance for accounting firms. Accountancy Insurance says the policy takes a wide view of what counts as an audit. It includes official reviews, inquiries, investigations and examinations, as well as audits, of a client's lodged returns or financial compliance obligations, where the client or their accountant has to respond.
Accountancy Insurance lists these types of audit activity as covered:
- Income tax, GST and BAS
- Capital gains tax
- Fringe benefits tax
- Employer obligations, including superannuation guarantee and PAYG
- Payroll tax, land tax and stamp duty audits by state revenue offices
- Self-managed super funds
- Record keeping
- Workers compensation (WorkCover)
- The R&D tax incentive (ATO audits only)
Accountancy Insurance also says that once you are covered, audits of earlier returns are included, even returns we did not prepare or lodge, provided the audit begins during the period of cover. There is no excess.
What it does not cover
Audit Shield pays professional fees. Accountancy Insurance says the policy does not pay for work unrelated to responding to the audit, or for fees beyond the limit of cover. Like any insurance, it will not cover every event or loss, and cover is subject to the terms, conditions and exclusions in the policy.
Accountancy Insurance does not list tax, interest or penalties as covered, so any amount the ATO or a revenue office decides you owe after an audit remains yours to pay. If an audit leaves you with a debt, see our managing tax debt service and our guide to ATO payment plans.
How it works with Ross Accounting
If the ATO or a revenue office contacts you, send us the letter as soon as it arrives so we can work out what is being asked and how to respond.
Once the audit is finalised, the claim is made through Accountancy Insurance's online portal with the authority's correspondence and our invoice. Accountancy Insurance says that, subject to approval, claims are usually paid within 14 days. For clients who hold cover, it goes towards our fees for the audit response, up to the limit of cover and subject to the policy terms.
Ask us whether Audit Shield cover is available to you, how much it costs and the limit of cover. Read the policy wording and disclosure documents from Accountancy Insurance before deciding whether the cover suits you.
Audit Shield is underwritten by AAI Limited (ABN 48 005 297 807), trading as Vero Insurance (AFS Licence 230859). Accountancy Insurance Underwriting Pty Ltd (AFS Licence 340731) issues the product under a binder, and Accountancy Insurance Pty Ltd (AFSL 276100) provides financial product advice about it and distributes it. The two Accountancy Insurance companies are related. This page is general information only and does not take your objectives, financial situation or needs into account.
Good records make any audit easier
Audit insurance can pay for the professional time an eligible audit takes, up to the limit of cover, but good records shorten it. The ATO generally expects business records to be kept for 5 years, and individuals need records that support every deduction they claim. Our guides on business record keeping and record keeping for individuals set out what to keep.
If you find a mistake in a return before the ATO does, it is usually better to fix it. Our guide to amending a tax return explains the time limits.
How it works
- 1Ask us about cover
Call 1300 711 149 or contact us to find out whether Audit Shield is available to you and what it costs.
- 2Send us any ATO letter
If the ATO or a revenue office contacts you, forward the letter to us straight away.
- 3Claiming under the policy
For clients with cover, our fees for the audit response are claimed under the policy once the audit is finalised.
What to bring
- The letter or notice from the ATO or revenue office
- The return, BAS or other lodgement being reviewed
- Receipts, invoices, bank statements and other records that support the figures
- Payroll, super and STP reports for employer audits
Call 1300 711 149 or contact us to ask about Audit Shield cover.
General information only, not personal advice. Tax rules change and your circumstances matter, so talk to us before acting. See our disclaimer.
Audit Insurance FAQs
What is tax audit insurance?
Tax audit insurance covers the professional fees of responding to an audit, review or inquiry by the ATO or another government revenue authority. Ross Accounting offers it through Audit Shield from Accountancy Insurance, which covers the fees an accountant would normally charge, up to the limit of cover and subject to the policy terms.
Does audit insurance pay the tax or penalties from an audit?
No. Audit Shield covers the professional fees of responding to an eligible audit or review. Accountancy Insurance does not list tax, interest or penalties as covered, and says the policy does not pay for work unrelated to the audit response or for fees beyond the limit of cover.
Does Audit Shield cover returns lodged before I took out cover?
According to Accountancy Insurance, yes. Once you are covered, audits of earlier returns are included, even returns your current accountant did not prepare, as long as the audit starts during the period of cover.
Are payroll tax and state revenue office audits covered?
Accountancy Insurance says Audit Shield covers audits by state revenue offices, including payroll tax, land tax and stamp duty, as well as workers compensation audits. Its claims figures for 1 July 2025 to 30 June 2026 show payroll tax as the most frequent claim category, at about 15% of claims.
