Agents must comply with TPB Professional Indemnity Insurance requirements
The Administrative Appeals Tribunal (AAT) recently affirmed the Tax Practitioners Board’s (TPB) decision to require a registered tax agent to maintain Professional Indemnity (PI) insurance cover.
In considering the appeal by agent, Ferdinand Lengyel, the AAT considered and applied the TPB’s policy on PI Insurance cover. The decision confirms the importance of registered tax and BAS agents maintaining PI insurance cover in accordance with the TPB’s requirements.
The AAT noted that the TPB has adopted a policy that as from 1 July 2011, all
registered tax and BAS agents are required to maintain PI insurance, unless exempted.
Chair of the TPB, Dale Boucher said “A registered tax or BAS agent may breach the Code of Professional Conduct if they fail to maintain PI insurance cover in accordance with the TPB’s requirements.”
Mr Lengyel had submitted that he should be exempt from the PI insurance requirement because he had a low turnover and could meet any claims from his own resources.
The AAT made it clear that registered tax and BAS agents can obtain PI insurance cover at fairly low cost and that the purpose of the cover is to protect consumers and guard against unforeseen circumstances.
“Registered agents should take care to have PI insurance cover, so as not to put themselves and their clients at risk” Mr Boucher said.
With the commencement of the 2012/2013 financial year, many PI insurance policies will be coming up for renewal. All registered tax and BAS agents must ensure they meet the TPB’s PI insurance requirements and notify the TPB of their latest PI insurance cover arrangements.
The TPB regulates tax and BAS agents to protect consumers. The TPB aims to assure the community that tax and BAS agents meet appropriate standards of professional and ethical conduct.
Visit www.tpb.gov.au for details on the PI insurance requirements for registered tax and BAS agents.