Commercial Legal Expenses Insurance can provide cover for certain costs incurred when a business is subject to an Australian Taxation Office investigation or tax-related dispute.

Depending on the policy, this can include approved costs for accountants, tax advisers, lawyers or other professional representatives assisting the business during an insured investigation.

What types of tax matters can be covered? #

The scope varies between policies, but cover may apply to certain ATO investigations or disputes involving the business’s tax affairs.

The policy may specify exactly which types of investigation are covered and can contain different conditions for matters involving income tax, GST, fringe benefits tax or other taxation issues.

It is important to check the relevant policy section rather than assuming every ATO enquiry or audit is insured.

What costs can be covered? #

Depending on the policy, cover can include approved professional fees incurred in responding to an insured ATO investigation.

This may include costs associated with:

• Preparing information requested by the ATO.
• Responding to enquiries or correspondence.
• Professional representation during the investigation.
• Obtaining specialist tax or legal advice.
• Defending or responding to certain insured tax disputes.

The costs generally need to be connected with an insured matter and comply with the policy’s notification and approval requirements.

Are additional tax, fines or penalties covered? #

They should not be assumed to be covered.

Legal Expenses Insurance is generally designed to cover specified professional and legal costs rather than the underlying tax liability itself.

Additional tax assessed by the ATO, penalties, interest and fines may fall outside the cover.

Are existing ATO investigations covered? #

Businesses should not assume an investigation that commenced, or was known about, before the relevant cover began will be insured.

If you receive correspondence from the ATO that could lead to an investigation or dispute, contact Webber Insurance promptly so the relevant policy requirements can be reviewed.