Plans to make unregulated advisors hold professional indemnity insurance are inadequate, says AAT
23 March 2021
As part of today’s "Tax Day" announcements, HMRC has this afternoon published a new consultation proposing compulsory professional indemnity insurance (PII) for unregulated accountants and tax advisors who currently make up a third of the sector.
Adam Harper, Director of Professional Standards & Policy at AAT, said: "It is already clear that doing nothing more than requiring unregulated tax advisors and accountants to hold PII – as has been required of professional body members for decades –is simply inadequate. It could arguably make a small improvement to the symptoms of unregulated advice but does nothing to address the causes.
"There are serious tax evasion and money laundering consequences of having so many unregulated accountants and tax advisors, and there are frequent horror stories of mistakes and poor advice that can leave taxpayers with unnecessary fines, penalties and tax liabilities. The unregulated are also costing the Exchequer hundreds of millions of pounds a year.
"If the government is serious about tackling this problem, it needs to make professional body membership compulsory for anyone providing paid for tax and accountancy services. Doctors, nurses and solicitors have long been required by law to belong to a professional body, why not accountants and tax advisors?"
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