Chapter 17 Flashcards
Is it compulsory for CIOT and ATT members to have PII insurance?
Yes - since July 1997 for CIOT and Jan 2000 for ATT
What is classed as a director in regards to PII?
A director who is on the board of directors (doesn’t include directors who aren’t on the board)
Do members who work on a self-employed subcontracted need to hold PII?
Not necessarily - don’t need PII in their own right provided they have obtained written confirmation from the contracting firms that its PII complies with CIOT
Who are exempt from having PI?
- Members who receive an honorarium of less than £1,000 per annum
- Members who carry out pro bono work in their own capacity
Whats the annual minimum limit of indemnity for each an every claim?
£1 million when the firm’s gross fee income is over £400,000
Where firm’s gross fee income is less than £400,000, the annual minimum is the greater of:
• 2.5 x the gross income fee
• £100,000
What level of excess is allowed under the CIOT’s Compulsory Professional Indemnity Insurance regulations?
Up to £20,000 per principal
What should a member do if it is unable to obtain PII?
Notify CIOT and ATT ASAP
How long is a member required to maintain PII cover after ceasing public practice?
6 years
What must a member do before deciding the level of their PII cover?
Carry out a risk assessment
Looks at:
• The risk profile of work carried out
• What resources are available to them
• Does the firms have effective systems in place to minimise risk of a claim
How is gross fee income defined in PII regulations?
The aggregate of professional fees and all other income earned in respect of and in the course of business during the accounting year immediately preceding the year in question
I am an employee, do I need PII cover?
Should be protected by your employer’s PII policy or other insurance arrangements
- unless director or employee has financial interest which represents 5% or more of the equity capital in employer’s taxation services
How is honorarium defined as?
A fee paid in respect of a formal honorary post for charities, amateur organisations and other not for profit organisations
A PII policy can be on two different basies, what are they?
- ‘Each and every’ claim basis
* ‘Aggregate’ basis
Should a PII policy “all civil liability”?
Yes
What is the difference for ‘cost inclusive’ and ‘cost in addition’ for PII?
‘cost inclusive’ - where the costs of defencing a claim are included within the limit of indemnity
‘costs in addition’ - where the costs are paid in addition to the limit of indemnity
