The Tax Practitioners Board (TPB) requirement that all tax and Business Activity Statements (BAS) agents have professional indemnity (PI) cover will not be an issue, says a bookkeeping body.

Institute of Certified Bookkeepers (ICB) Director John Birse says all of its members already have PI cover.

“We have more than 2000 members and it is a requirement of the institute that they have PI insurance,” he told insuranceNEWS.com.au.

“We have no problems with the TPB’s recommendation on PI cover – we just think there are some details to clarify.”

The TPB will require all tax and BAS agents to have PI cover from July 1, 2012.

There will be a transition period in the year before to enable agents who have cover to adjust their policies to meet the board’s insurance requirements and registering agents to obtain cover.

In its exposure draft on the topic, the TPB is looking for “adequate cover that will satisfactorily indemnify an agent against any civil liability that may arise in the agent’s provision of tax agent or BAS services”.

The board says it is the agent’s responsibility to define what is “adequate” in regard to the risks.

Mr Birse says agents can perform more services than just bookkeeping, such as installing software, and these areas need also to be looked at for cover.

“Generally, agents are not sued for the tax administration [but] when a client suffers penalties (from the ATO) which is the result of an agent’s actions,” he said.

The ICB negotiated a PI policy with Insurance Made Easy, underwritten by Chubb. Mr Birse says many PI policies are designed for accountants working in offices with large client bases, compared to tax agents working from home with small client bases.

“We did work on what the definition of a bookkeeper was and this is now used throughout the industry.”