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The contract
The client of the accountancy practice is the Insured.
The accountancy practice sends an initial letter and application form to its clients inviting them to purchase Professional Expenses Insurance (PEI). The client will send the signed form and payment directly back to Abbey Tax who will issue documentation to the client and, in certain circumstances, remit commission to the practice.
Practices that are authorised by the Financial Services Authority or licensed by their Designated Professional Body, can recommend PEI and may make claims on behalf of their clients. Firms that are not regulated must not advise on the insurance, handle premiums or make claims.
The cover
The practice is the Designated Agent to deal with all claims arising and the limit of indemnity for any one claim is £75,000. The standard areas of cover are:
• Self Assessment Full Enquiries
• Employer Compliance Disputes (including PAYE,NIC,P11D and IR35)
• HM Customs and Excise VAT Disputes
We can also provide Aspect Enquiry cover to match the practice’s requirements and client profile, although in order to keep premiums at commercial levels, we will often suggest that Policy excesses and lower limits of indemnity are incorporated.
The scheme
At the inception of a ‘Client-Decide-Direct’ scheme we will ask the practice to send information about the insurance to all clients, although, clearly, only those clients who respond are covered.
We usually aim to have a common renewal date for those clients who subscribe and Abbey Tax will issue the renewal documentation. However, we are also able to support ‘rolling renewals’ where clients are renewed throughout the year.
For those practices who undertake regulated activities (e.g. advising on PEI or making claims), FSA and DPB regulation requires the practice to issue Demands & Needs (D & N) statements to clients; we will provide generic D & N documents to the practice to use as a basis for writing to clients.
At the scheme inception we can provide the practice with suggested letters, investigation statistics, articles and leaflets.
Additionally, telephone advice to the practice in respect of contentious tax and VAT matters is an automatic feature of the scheme and a legal helpline is also available to both the practice and the subscribing clients.
IPT/VAT & Commission
Insurance Premium Tax (IPT) is included in the premium that Abbey Tax charges the client. The insurance is VAT exempt, so no VAT is due on the premium.
Commission can be built into the premium that is charged to the client and Abbey Tax will remit this to the practice. However, most accountancy Institutes, as a part of their fiduciary regulations, require that the practice declares this commission to its clients. Furthermore, some Institutes require that the practice offers to remit the commission back to the client.
The Policy
The Policy for this scheme can be issued on request. Please call 0870 166 6270
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