Hi I'm new to this forum and came across whilst looking for info on practice Licenses.
I have been doing bookkeeping for over 15years, and having had a family and moved house, have decided to set up on my own doing bookkeeping from home on a self employed basis.
I am doing a few jobs for an accountancy firm who advised me to get Professional Indemnity Insurance which I have. I have now been asked by a different Bookkeeping company about my practice license.
I don't have a professional qualification (although am now looking at doing the AAT Level II & Level III) and I only do bookkeeping up to Trial Balance to be passed onto an accountant. As I understand it, due to this, I do not need a Practice License and the Professional Indemnity is enough, until I am qualified and able to go beyond trial balance, but I just wanted to get it confirmed. Where do I go to find out?
as you rightly identified the practice licence is only really to give you a licence to say that you are a member of one of the supervisory bodies.
PII insurance is a sensible precaution especially in this increasingly letigous society! You don't need a practice licence to get PII but you do need PII to get a practice licence. It's just the supervisory bodies way of enforcing that you to look after yourself.
Never forget that the quality of your work is covered by the Supply of Goods and Services act. Clients have a right to sue you for mistakes in order to put them back into the state that they would have been in had the mistake not been made. This can be VERY expensive so PII is to my mind an absolute essential for business.
The insurance companies ask for a minimum of two years practical experience or qualification with a recognised supervisory body (Preferably both). Insurance through one of the insurers of the supervisory bodies will prove cheaper. ICB, IAB and AAT all use Trafalgar but unless you have a practice certificate from one of these you will need to be looking at companies such as Hiscox and Morethan.
The one thing that you absolutely muyst have in order to practice or risk a heavy fine and the possibiolity of jail time is to be registered under the Money Laundering Regulations (MLR). This is normally done via membership of a supervisory organisation such as the ICB or AAT. Alternatively you can register your business directly with HMRC. I think that the current fee by HMRC is £120 for registration.
Hope that this short introduction helps,
talk soon,
Shaun,
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Shamus, you didn't mention that Sam could apply via membership of a supervisory organisation such as the IAB. I don't know what exeptions the IAB give but I do know that do give exemptions to applicants for some of the AAT and other bookkeeping exams. They have even introduced a APL route for bookkeepers with lots of experience who are prepared to attempt it rather than take formal exams.
PI can be through anyone with the IAB, just a long as a member in practice who needs to have PI has it.
-- Edited by YLB-HO on Friday 4th of March 2011 09:25:25 PM
-- Edited by YLB-HO on Friday 4th of March 2011 09:25:51 PM
