What is ‘PCRT’?

 Professional Conduct in Relation to Tax (PCRT) has been prepared jointly by seven professional bodies and associations, including ACCA and ICAEW, whose members work in tax. Compliance is mandatory for members advising on UK tax matters. It has been endorsed by HMRC as an acceptable basis for dealings between members and HMRC. It consists of seven fundamental principles and five standards for tax planning. There is also a series of very useful complementary help sheets.

 Isn’t the application of PCRT common sense?

To a greater extent, the application of PCRT is common sense. Take the five principles for example. They are integrity, objectivity, professional behaviour, professional competence and due care and confidentiality. These are the five fundamental ethical principles, based on the IESBA (International Ethics Standard Board for Accountants) Code, that all professional accountants are required to adhere to anyway.

 Are all tax practitioners expected to have read the PCRT?

Ideally, yes. However, many firms have policies and procedures governing tax advisory and compliance work which are built on the core concepts of PCRT. The chances are that if you’re adhering to those policies and procedures day to day, then you’re also adhering to PCRT.

What’s changing?

Changes to PCRT have been introduced with effect from 1 January 2026. The changes are fairly minor:

• The wording used for the fundamental principles has been changed, although the principles themselves are the same.

• There’s a requirement to disclose to the client any relationship a member has with a third party. That could be where a client engages a member to advise on a tax planning arrangement developed by a third party.

• There is strong emphasis on ensuring advice is tailored, based a strong client understanding.

• There are more explicit requirements where a member disagrees with a tax strategy being pursued by a client. Where a member feels that a tax planning arrangement does not have a credible basis they must inform the client of the basis of their assessment; communicate to the client the possible consequences of pursuing that arrangement; and then advise the client not to pursue it.

• There is clarification that PCRT applies where the member has been engaged to provide a second opinion.

Where do firms go wrong?

 We spoke to members of our tax team about this, and they came back with the following points:

• In the early days of PCRT, there was occasionally conflict between some advisors’ attitudes about what was acceptable in terms of tax planning and the prevalent PCRT view that aggressive tax avoidance is unacceptable. That is perhaps less of an issue these days.
• Sometimes advisors can be complacent about potential errors and challenging their clients on those. An example might be where a client is refurbishing a building and tells the accountant that it is all repair work.  Some advisers wouldn’t challenge for fear of having to have a discussion that some of the costs might not be deductible. 
• Similar situations can arise where an advisor suggests to a client that something might not be allowed, the client pushes back and the adviser backs down. That is perhaps why the 2026 changes have required advisors to take certain specific steps where they disagree with a client tax strategy.
• Sometimes advisors don’t think carefully enough about conflicts of interests that can arise when carrying out professional work, that need to be appropriately managed. An example might be where a contingent fee arrangement links fees to tax savings achieved by the advisor.
• A final concern, linked to professional competence and due care, is the risk of an advisor taking on work beyond their competency. This is a perennial problem for so many firms of accountants.

More information

ICAEW members can find more information about PCRT here, including a short webinar explaining the January 2026 changes to the principles and standards.