Audit Insurance.

What is an audit?

An Inland Revenue audit is a formal review of your tax affairs, where IRD checks that the income tax, GST, PAYE or FBT you've reported is correct. It can range from a simple phone or written enquiry through to a full investigation, and usually involves reviewing past returns, gathering and reconciling records like bank statements, invoices and payroll, preparing written responses, and dealing directly with IRD, often with an accountant's help.

How will I know if I’m being audited?

You may receive a phone call, email or letter from Inland Revenue letting you know that you are being audited or simply asking to review some of your transactions. If this happens, please let us know.

How can my accountant help?

Responding to an IRD risk enquiry takes time and professional expertise. Depending on the scope, our team may need to:

• Review the return in question, and sometimes several prior years

• Gather and reconcile your records, including bank statements, invoices, GST workings and payroll

• Prepare written responses and supporting schedules

• Deal directly with IR by phone, in writing and in meetings

• Bring in a tax specialist or lawyer if required

Even a straightforward query can take several hours. A full audit can run into many thousands of dollars in professional fees, and those fees apply whether or not IRD finds anything.

Introducing Audit Insurance

To take that worry off your plate, we're including tax audit insurance through FM Insure for every Whitelaw Weber client. FM Insure is a New Zealand-owned business that specialises in tax audit cover.

Here's what the cover includes:

• 100% of eligible professional fees, with no excess. This means our fees, plus any specialist or legal advice needed.

• $15,000 cover each year.

• Everything from a simple IR phone enquiry through to a full audit, including risk reviews and record-keeping checks.

• Income tax, GST, PAYE and FBT.

• Returns you've already filed, for the current year and previous years.

• Your wider business group, subject to ownership rules.

• No penalty on renewal if you make a claim.

Until October 2026, we’ve offered Audit Shield as an optional policy, with annual costs ranging from $170 to $700 per client. By moving to a policy that covers all our clients, we can significantly reduce the cost per client and make the process simpler for you. No separate renewal letters to review, forms to fill in or payments to arrange — we’ll take care of the cover and include the lower annual charge in your usual invoice.  When Inland Revenue contacts us with an enquiry, risk review or audit on your filed returns, we’ll manage the response and arrange for eligible professional fees to be covered under the policy.

What does it cost and why am I paying for this?

We will notify you in writing (by email or letter) confirming the annual cost.

With extra Government funding over the last two Budgets and advancements in AI, Inland Revenue has stepped up its audit activity. It completed 43% more audits in the year to May 2025, and the extra tax found more than doubled. IRD now uses automated screening, property records and payment data (such as EFTPOS transactions) to flag returns for review. 

IRD has been open about where it's directing its attention:

• Property. This is the largest area of audit activity. It covers property sales and people who own several properties across personal names, companies and trusts.

• Construction and trades. Plasterers and painters are a current focus.

• Cash-based businesses. This includes hospitality and retail, and IR has been making unannounced visits to liquor and vape stores.

• Companies and trusts. IR is looking closely at income kept in a company or trust, where it suspects this is being done to avoid the 39% personal tax rate.

• GST, PAYE and FBT. These are the everyday taxes most businesses deal with, so they're also the most common source of IR queries.

Being in one of these groups doesn't mean you're doing anything wrong. It simply means IRD is more likely to take a look.