It’s a pretty common thought that compensation claims can be invasive.
First they want this detail from that doctor.
Then they want this assessment from that psychologist.
Then they want pay statements from your employer.
And then they want to talk to your friends and family about you as a person.
And it doesn’t end there.
One of the most daunting things for most claimants is the financial audits.
With legal professionals going through every dinner transaction, every unpaid credit bill, every tax return, every mortgage repayment. It’s no surprise that this is the most daunting step for most.
Because the fact of the matter is, most people’s financial records aren’t in perfect order.
Everyone’s gotten busy at some point and forgotten to do something. Or made a mistake here or there without realising.
But it’s not what you’ve done in the past that matters most, it’s what you do now to fix it.
Particularly if you are hoping to claim for compensation.
A major part of a compensation claim is your credibility – that is, how trustworthy and believable you are. And part of that is your honesty in your every day life. Honesty in your tax returns and honesty in declaring all finances.
Now, if you’re sitting there more concerned than when you started reading, don’t worry.
Just because you have undeclared finances or incomplete tax returns does not mean you are excluded from recovering compensation if you have been injured.
After all, you were injured at no fault of your own, and one missed tax return does not mean you have to pay for that for the rest of your life.
Your credibility is a measure of how trustworthy and believable you are. This is an incredibly important factor in your claim for compensation.
It does mean, however, that you’ll need to tread very carefully when proceeding with your claim to ensure your credibility isn’t brought into question.
What options are available?
If you fall into this category, where your financials are questionable or not up to date but you wish to proceed with a claim, then you essentially have two options:
- 1Try to provide some other evidence of your financial loss;
- 2Fix up your returns/ financials.
If your financial documents aren’t exactly accurate, it may still be possible to prove your past earnings through other types of evidence.
These types of evidence could be pay slips or bank statements. If you are self-employed then invoices for jobs you have undertaken could be used to estimate your past income level with reasonable accuracy.
Once you have your past income level you will need to compare it to what you’ve recorded in the past and see if the difference is reasonable, explainable, and worth the risk in court.
Fixing up your returns
Your other option is to go back and lodge any outstanding returns, or amend your previously lodged returns.
To do this you will probably need to engage the assistance of a forensic accountant to examine your books and reconstruct your true earnings.
It’s important to realise that by doing this you may have additional tax liabilities owed to the ATO and or Centrelink, which will need to be deducted from the proceeds of your claim BUT it could also be the difference between winning and losing your claim.
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