All tax advisers should hold professional indemnity insurance

A new requirement for all tax advisers to hold professional indemnity insurance is the subject of a consultation from HMRC.

This is in light of responses to the call for evidence on raising agent standards last year. According to HMRC there was consensus among respondents it should be compulsory for all tax advisers to hold professional indemnity insurance because this would provide a baseline level of taxpayer protection. Some respondents also said that unaffiliated agents - around 30% of the tax advice market - who are potentially less likely to hold professional indemnity insurance are one of the main problems in the market. Further engagement with industry suggests that about half of unaffiliated agents may have professional indemnity insurance.

The requirement should not affect tax advisers who are already subject to regulatory oversight or who are a member of a professional body. These individuals are...