Forum

• # 69891
• Tue 29 Mar 2011 05:20 PM

I thought we were not supposed to be working without ins /membership.
Seems to be mixed messages.
Can you get ins for each level as you qualify because as I understand it you are not supposed to go beyond what you have covered in exams

I haven't set up biz put have decided on name played about with biz cards ect but not put them out yet.  Also decided to do Small Business course so that I will be ready when everything is in place.

Thanks

• marytrouble
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• # 69893
• Tue 29 Mar 2011 06:41 PM

Hi Mary

Indemnity insurance isn't connected to your level of membership of the ICB but to the level of cover you require.

When you take out the insurance it is for bookkeeping and you select how much cover you need, (£100,000 £250,000 ...). The only direction you get from the ICB is that the level of cover should be at least five times what you estimate your annual turnover will be.

Mike

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• # 69894
• Tue 29 Mar 2011 07:55 PM

Mikeee said:

“Hi Mary

Indemnity insurance isn't connected to your level of membership of the ICB but to the level of cover you require.

When you take out the insurance it is for bookkeeping and you select how much cover you need, (£100,000 £250,000 ...). The only direction you get from the ICB is that the level of cover should be at least five times what you estimate your annual turnover will be.

Mike”

• marytrouble
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• # 69897
• Tue 29 Mar 2011 11:47 PM

Hi Mary

it's all kind of wrapped up in the Money Laundering Regulations.

In order for us to be under the ICB's umbrella and get help in administering the MLR as well as the registration that goes with the MLR (all bookkeepers must do be registered now) you need to be a minimum of Associate Member cb cert (I think) for a practice licence and MLR registration.

I think you will find that with Trafalgar they wont grant you PI if you are a student - guessing it would be way too costly for them and you if anything went wrong.  But you may be able to get PI elsewhere (not sure).

Anyways back to the Q.  If, for instance, as an Associate cb cert with practice licence, they did a limited company's accounts to Final and there was a major error in those accounts then the limited company could sue the Associate or if an Associate or Member did payroll without the payroll qualification then the PI through trafalgar wouldn't cover and neither would the ICB.  Basically you can't use the ICB name and use it's umbrella for things you are not qualified to do.

In other words you could pop out your business cards, advertise your website but you couldn't put that you were part of the ICB anywhere.

You can have clients without quals and without being a practice licence holder but you might find it difficult to get PI and the MLR process isn't quite as smooth.  This was part of the reason I joined the ICB...the safety net.

hope I haven't confused you even more

Kind regards

Liz

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• # 69910
• Wed 30 Mar 2011 12:57 PM

I agree with what you say Liz, but I also think it can be even more messy if you practise without the right level of insurance and ICB membership.

If you set up a practise at Level 2, you can get PI and a practise license. The PI covers you for bookkeeping, it doesn't appear to be more detailed than that. But your ICB membership only covers you to do sole traders and not Ltd companies.

If you then went ahead and did the books for a Ltd company, I'm not sure how your PI stands if you made an error, insurance companies never pay if they can wriggle out of it.

But the real issue is as you say MLR, because the ICB do not cover you for Ltd companies at Level 2. Regardless of if you make an error or not you are breaking the MLR because as a bookkeeper you must be registered either directly with hmrc (which is quite costly) or through a supervisory authority such as the ICB.

The thing is not to confuse Indemnity Insurance with the ICB, Insurance covers you if you make errors which costs your client. Whearas the ICB registers your practise under MLR. I'm not sure what the penalty is for working as a bookkeeper without being registered under MLR  but I'm sure it would involve some kind of fine and being banned from practising as bookkeeper by hmrc.

Mike

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• # 69912
• Wed 30 Mar 2011 01:14 PM

Hi All

To clarify please see the diagram that Ami did on that attached Link below.

http://www.bookkeepers.org.uk/Membership/Joining_by_Examination

Once you join the ICB you agree to be bound by their rules and conduict regulations. These state that Students are not entitled to practice unless supervised or exceptional circumstances as agreed with the ICB.

Those that have passed Level 2 Associates may carry bookkeeping for all legal enitities both sole traders and limited companies upto trial balance. However with regards to sole traders they can go the step further to produce their accounts.

Those qualified to Level 3 can go a step further in producing draft accounts for limited companies and also produce the accounts for partnerships.

You cannot undertake payroll work until you have passed the payroll qualification and are PM.dip

Similarly you may be able to produce a sole traders accounts at Level 2 but you cannot file his self assesment return until you passed the Self assesment retun.

As Liz does rightly state you can do all of the above without having to be qualified at all and having no PI insurance (but you must register with HMRC to be you MLR supervisor) if you are not a member of the Institute however the minute you join the rules apply and you should not carry out any work your level does not afford you to do

I hope this helps.

Cheers
Stuart 

Edited at 30 Mar 2011 01:18 PM GMT

• Forum Moderator, South East & Greater London Regional Chairman
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• # 69937
• Wed 30 Mar 2011 03:44 PM

Stuart Wildman said:

Once you join the ICB you agree to be bound by their rules and conduict regulations. These state that Students are not entitled to practice unless supervised or exceptional circumstances as agreed with the ICB.

 if you are not a member of the Institute however the minute you join the rules apply and you should not carry out any work your level does not afford you to do

I hope this helps.

Cheers
Stuart 

Edited at 30 Mar 2011 01:18 PM GMT”


Thanks for clarifying this bit Stuart, wasn't 100% sure about it.  I waited until I was covered with exams, practice licence and MLR before resuming an old client's books - hadn't touched them for a few years because of full time employment and MLR regs being brought in.  Thankfully he had managed really well on his own, apart from the madness creeping in and not having time to get his 'proper' work done.  He keeps saying how chuffed he is I'm back on board for him.

Liz D

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