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Tax agents will be required to take out PI Insurance from july 2011

By: admin|

Tax agents will be required to take of PI insurance that meets the minimum standards of the Tax practitioners Board from July 2011. The amount of insurance will depend upon the business turnover amount and as an example turnover of $75,000 will require a minimum cover of $250,000.

Insurance must cover contractors and employees and must include run off cover if the tax agent stops providing a services and the cover must be set at no more tha 4% of the tax agents turnover or less than $1,000.

The requirement applies to all tax and business advisers who provide tax and BAS services for a fee.

Surprisingly there are 60,000 agents registered with the board.

The requirements are to ensure that further protection is offered to consumers along with the many other professions in Australia also having to meet PI requirements. Australian consumers are now the second most litigious in the world after America so no profession in Australian can afford to offer any services without having adequate insurance in place. More claims will result in cost prohibitive policies and less participants and hence in the long run the rush to protect consumers will also see the demise of many professionals operating in Australia.

This is now being resolved by having more and more back office facilities operating offshore and hence will see also a decline in opportunities for Australian workers, so in the haste to protect consumers, will also see reduced opportunities for many consumers. There is no win/win here at all with what is unraveling in Australia.

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