Here are some tips on how to manage the audit process:
- If you are selected for audit, make sure the ATO provide you in writing with a clear scope of the areas they want to review.
- Don’t feel rushed to set the date for the ATO to visit. You are entitled to agree a date that fits with your business program – within reason.
- Allow sufficient time to review the records of the audit area and to ensure that there are no issues or problems.
- Be prepared. Have the files and documents ready for the auditor. You do not want to be chasing these down on the day.
- During the audit stick to the issues at hand. Too many people talk themselves into problems by opening up other issues. Stay on point, answer the questions asked and move on.
- If a problem does exist, consider whether you should make a voluntary disclosure. It will not save you the tax liability but will mitigate on penalties.
- Accept that the ATO auditors have a job to do. Don’t go into the meeting with a chip on your shoulder or looking to pick a fight.
- Use an advisor. Your accountant should be experienced in managing tax audits. Having them in attendance and working with you should protect your interests and assist the efficiency of the process.
There are more audits occurring. Knowing how to manage them will protect you from the downside.
Greg Hayes is a director of Hayes Knight and specialises in taxation and business planning advice.
