If my tax adviser (“gestor”) made a mistake and the tax authorities fine me, does the adviser's insurance pay?

Question

José Manuel Alburquerque · Accepted Answer

You are the one answerable to the tax authorities, even if the mistake was the tax adviser's, so you will have to pay what they demand or appeal against it. You can then claim from the tax adviser what their mistake has cost you, such as the penalty and the surcharges. If the tax adviser has liability insurance, you can also claim directly against the insurer. The tax itself is not normally recoverable, because it had to be paid anyway, unless the mistake made you lose a tax advantage. Late-payment interest is more debatable, because you had the money during that time. What you can claim The penalty and the surcharges you would not have incurred if the tax adviser had done the job properly. The cost of putting the mistake right and of defending yourself before the tax authorities, such as what you have paid another adviser. The tax, only if the mistake made you pay more than you would otherwise have paid, for example because the deadline for opting into a more favourable regime was missed. Late-payment interest, with an uncertain outcome. Whether it counts as a loss is debated, because you had the money during that time. The tax adviser's insurance In Catalonia, the law obliges anyone practising a profession that requires a university degree to have liability insurance or an equivalent guarantee. In principle, that includes tax advisers registered as “gestores administrativos” with their professional association, as well as economists or lawyers who give advice in that capacity. A tax adviser without a degree or professional membership is under no general legal obligation to be insured. Ask them whether they have insurance. Ask the tax adviser in writing for their policy details and claim against both of them. Check what the policy covers and what it excludes. Before making a claim Appeal against the penalty if there are grounds, but be aware that by appealing you lose the reduction the tax authorities give to those who pay it on time without appealing. If the mistake was due to a reasonable interpretation of the rules, there may be no penalty. Keep the engagement letter, the emails and the documents showing what you instructed the tax adviser to do and what information you gave them, because if the mistake was due to information you did not provide, the tax adviser may escape liability. The time limit for claiming against them is in principle five years, or ten in Catalonia if the engagement is governed by Catalan law. Even so, do not wait, because these policies usually only cover claims made while they are in force.