We have tried to transcribe the questions as close to the original as possible, although the answers have been further considered and clarified prior to writing.

Q: It states in the policy that late returns are not covered. Late returns are very common. What if it can be established that the enquiry is not connected or associated to the late return?

A: Enquiries into returns that are submitted late are not covered by the policy. However, if it can be established that the risk of the enquiry was not increased by the fact that the return is late and indeed the enquiry is not associated to the return being late, then we would not unreasonably withhold cover. The existence of the insurance will enable the practice to further incentivise insured clients to produce their information in good time.

Q: Are external specialist fees covered by the policy?

A: Yes, where approved by Qdos in advance of appointing the specialists.

Q: Do Qdos provide advice and assistance on enquiries?

A: Not presently, but it is our intention to do so. As the product grows, Qdos will appoint specialists who can assist or handle enquiries on behalf of firms. The mid term business plan is to have in-house specialists, following the UK business model.

Q: The business premium also covers the partners/directors. If these people are engaged by other accountant firms to the business, who would be appointed to handle the enquiry?

A: The rule of thumb is that the firm who the person is engaged with, will be appointed to handle the enquiry. However, the insured’s requests will be noted and not unreasonably refused. The existence of the insurance provides an opportunity for practices to gain the tax return work of partners and directors who may currently prepare their own returns, as cover will only be granted where returns are prepared by a professional accountant.

Q: The policy states that fees must be agreed in advance of the enquiry work being undertaken. What if the work has been started and Qdos have not been notified?

A: Pre notification work is not covered by the policy. The onus is on the insured party (the client of the accountant) to notify Qdos of a claim before the accountant is appointed to act. However, it is recognised that the accountant may notify Qdos on behalf of the client. The client’s own responsibility to notify will be made clear with the policy documentation.

Qdos will work with the accountant to resolve such situations amicably, but cannot guarantee that all fees prior to notification will be covered. In particular, circumstances where the enquiry is completed and Qdos are first notified at the final billing stages can be problematic.

Q: If an insured client leaves the practice and is engaged by another firm, who will be appointed to act on behalf of an insured enquiry?

A: Qdos will take note of the client’s request to engage the new firm.

Q: What if the client has been naughty?

A: The policy will exclude cases of reckless non-compliance and states the requirement that clients keep prime records. It will also exclude fees where there are allegations of fraud, but has been known to reinstate cover where these allegations are proven to be untrue. It will not pay for time used to reconstruct records, which otherwise would have occurred prior to the enquiry. However, this is a relative issue and Qdos will take a pragmatic and proportionate approach depending upon the circumstances. Generally the view of Qdos is leniency in these circumstances.

Q: What is the maximum payout per client?

A: In any claim and in the year of insurance, the maximum payout is R50,000 for private individuals and R250,000 for businesses including directors.

Q: Some high wealth individuals will require more than R50,000 of fees to defend enquiries?

A: A private individual is defined by maximum income from employment as R1,000,000. However, if they have income from self employment then they are defined as a business. Therefore they will have a maximum of R250,000.

Q: If the claim is deemed to not be covered for reason of fraud or otherwise, but fees have been incurred up to this point, would the fees be paid?

A: Yes, fees are authorised to a limit and firms are requested to come back to Qdos for further authorisation before exceeding this limit. If fees have been incurred following authorisation and for any reason the cover is subsequently refused, then the fees incurred to the date of refusal will be honoured.

Q: What is the position with VAT?

A: The premiums quoted are VAT inclusive. As the client is the insured person, the supply of your services in an enquiry is to the client. The insurance compensates the client for the losses incurred. Therefore, so long as your client is VAT registered, then you send your client a VAT invoice for the VAT on the fees that you are billing Qdos.

Q: Can accountants who are not FSB registered for sale of insurance promote this product?

A: The product marketing process has been specifically designed for non insurance FSB registered accountants. Accountants are providing information without advising. As a result they are not carrying out an insurance activity that is regulated by FSB. Regarding claims they are appointed by the insurer as the consultant and therefore also not carrying out an insurance activity that is regulated by FSB.