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Registered agents to have Professional Indemnity Insurance

Monday, October 18, 2010

Registered agents to have Professional Indemnity Insurance

The Tax Practitioners Board (TPB) today released details of its proposed requirement that registered tax agents and BAS agents are to hold professional indemnity (PI) insurance cover from 1 July 2011.

This will apply to approximately 60,000 agents now coming under the TPB’s jurisdiction.

Chair of the TPB, Dale Boucher, said “This new requirement will provide a greater level of consumer protection for the Australian community, particularly for anyone who pays for the services of tax agents and BAS agents”.

“Most of the 26,000 tax agents, who were registered when the TPB commenced earlier this year, already have PI Insurance. A good example is tax agents or BAS agents who are members of professional associations who are likely to have this type of cover”.

Many newly registered BAS agents, however will not have PI Insurance cover. Mr Boucher said “By clearly defining and introducing this requirement from 1 July next year, we are taking strong action to help members of the public where the negligent actions of an agent may cause some financial loss or damage”.

“We are always keen to develop policies in consultation with tax practitioners and the associations. This reinforces already existing high-levels of professionalism in our agent community. 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”.

An Exposure Draft, setting out details of the TPB’s proposed PI Insurance requirement for registered agents, was issued this week. The draft outlines the TPB approach in general and sets out:

  • why agents will need to have cover
  • what is adequate cover and how to obtain it in time for 1 July 2011 when agents will need to be covered, and
  • the consequences if agents don’t comply.

The Tax Practitioners Board’s exposure draft on Professional Indemnity Insurance will be open for public comment until 15 November 2010. The exposure draft can be found at www.tpb.gov.au For any further information please contact Janette Luu 02 6216 1343.