The Tax Practitioner's Board has told agents to inform them of their professional indemnity status, even if to say their insurance is covered by an employer or is part of their professional-body membership.
The board says compulsory professional indemnity insurance for bookkeepers and tax agents is designed to provide protection for consumers, as well as for agents if professional negligence claims are made against them by clients.
TPB chair Dale Boucher told SmartCompany the costs for agents should not be prohibitive.
"It depends on whether people are members of an association, but premiums could be as low as $300 or $400," Boucher says.
"For some it might be more, but it's our view that this is a normal cost of doing business, and it's obviously tax deductable."
Boucher declined to name the likely number of underinsured agents, but the new regulations could affect more than 10,000 people.
"The BAS sector grew up with the introduction of the GST, and over time both sides of politics agreed they should be registered," he says.
TPB says the push has been talked about for some time, and agents are responsible for ensuring they have the right protections in place as members of a profession.
Boucher says penalties for not meeting the board's minimum requirements include a caution requiring the individual to comply with a board order, or a suspension or termination of an individual's registration.
He says the board will not be heavy-handed.
"If somebody doesn't have insurance, but said they would get it within a reasonable time – say, a few weeks – then the board would consider that," Boucher says.
Those with existing insurance in place that does not meet the TPB's requirements have a 12-month period, until July 2012, to get sufficient coverage.
Related Items :
