Compulsory professional indemnity insurance for tax advisers useful but no ‘magic bullet’

Jeremy Coker, ATT President, said:

“This consultation follows a decade of discussion about raising standards in the tax advice market, with responses to a wide ranging consultation last year again demonstrating the complexity of the issues involved.”

The current consultation follows up the single aspect of the role of professional insurance. The consultation seeks to identify the practicalities and implications of making professional insurance mandatory for all tax advisers. That is not an issue for members of professional bodies such as the ATT.  ATT members in practice are all obliged to have professional indemnity insurance for the benefit of their clients.

Jeremy Coker said:

“Levelling the playing field so that all taxpayers know that their advisers have such insurance makes a lot of sense but devising a system which will ensure that advisers who are not members of a professional body do have insurance cover is not simple.” 

The consultation asks for views on whether the introduction of mandatory insurance will meet the policy aims of improving trust, reducing poor adviser behaviour and providing redress.

Jeremy Coker said:

“We see the introduction of mandatory insurance as essential but it is not a magic bullet in improving consumer protection in the tax advice market. In particular, it will not take out the hard core minority of unscrupulous tax advisers.

“It needs to be accompanied by adherence to common professional standards by all tax advisers, and that can only be achieved if they are subject to formal disciplinary and complaints proceedings through a professional body.

“We look forward to engaging positively with this new consultation. In doing so, we will continue to advocate the need for a more comprehensive approach to consumer protection in the tax advice market."

---

Notes for editors

1. The consultation document is here.