Tax agents required to have professional indemnity insurance

According to a draft proposal released recently from the Tax Practicioners Board, both BAS agents and registered tax agents will be facing requirements to hold indemnity insurance from July 1 of next year.

If the draft proposal is adopted by the Board, a figure of about 60,000 BAS and tax agents who fall under the jurisdiction of the TPB will now be required to take out professional liability insurance.

Dale Boucher, Tax Practioners Board Chairman, commented on the design of the proposal, stating that the intent is to ensure that BAS agents are brought into line with the majority of the industry, who are already required to have valid public liability insurance cover.

The new requirement, stated Mr Boucher, is being instituted to provide higher levels of protection for consumers, in particular for any consumer who regularly employs the services of BAS agents and tax agents.

Mr Boucher also added that the majority of the 26,000 tax agents that, since the commencement of the TPB earlier in the year, have registered with the Board, already have business liability insurance. For example, BAS agents or tax agents who belong to professional organisations will already have the cover.

Many agents newly registered with the TPB will not have the proper cover, however, and Mr Boucher stated that the organisation is taking decisive action to aid members of the public when financial damage or loss may have been caused by the negligence of an agent, by clearly introducing and defining the new requirement from July 1 of 2011.

The TPB has always sought to institute policy changes with the feedback of both tax practitioners and associations, in order to reinforce the high standard of professional behaviour in the agent community continued Mr Boucher. He believes that the newly instituted requirement will act as a prime example of the TPB working in tandem with the professional community to not only protect their clients better but also to develop solutions that are practical.We believe this new requirement is a good example of the TPB working together with the professions to develop practical solutions, to better protect the community”.

The details of the new registered agent requirements in regards for indemnity insurance were set out and issued in a recent Exposure Draft by the TPB.

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