AAT welcomes government decision on tax advisers holding Professional Indemnity Insurance

HM Revenue & Customs has published the summary of responses to its recent consultation on raising standards in the tax advice market. The summary includes an announcement that the government will not be proceeding with the introduction of a requirement for tax advisers to hold Professional Indemnity Insurance (PII).

Responding to the announcement, Adam Harper, Director of Professional Standards and Policy, AAT (Association of Accounting Technicians), said:

“We welcome this announcement by the government that it will not be proceeding with the introduction of mandatory PII for unregulated tax advisers. AAT has long campaigned against this and raised our concerns in our response to the "Raising standards in the tax advice market" consultation, where we advised that this proposal was inadequate.

“Unregulated tax advisers account for the majority of agent-related complaints to HMRC as well as contributing to tax evasion and money laundering activities. Additionally, their mistakes and errors leave many taxpayers facing large and unnecessary fines and penalties, whilst also costing the Exchequer hundreds of millions of pounds a year through overclaiming or wrongly claiming various tax reliefs.

“If the government is serious about tackling these problems, then it should make membership of a professional body mandatory for anyone offering paid-for tax and accountancy services. AAT has been campaigning on this issue for many years and is supported by the public and our members on this, as well as by over three-quarters of MPs.

“AAT will be responding to the government’s consultation on improving the wider regulatory framework supporting standards in tax advice next year and welcomes the opportunity to do so. However, we are disappointed that time has been wasted considering the inadequate proposals in the 2021 consultation when a ready-made solution exists. In the meantime, especially ahead of the self-assessment deadline in January, we would encourage everyone to ensure that they get paid-for tax advice from a member of a relevant professional body, to ensure they receive the most up-to-date and accurate advice for them.”

To help with finding a member of a relevant professional body who can provide paid-for tax advice and protect your financial interests, AAT has published a free consumer guide, "What you should know before appointing an accountant", as part of the ongoing Accountable campaign. More information about the campaign is available on "All accountants should be Accountable".