Professional Conduct in Relation to Taxation (PCRT) is the ethical code that governs how members of the main UK accountancy and tax bodies carry out tax work. Issued jointly by seven professional bodies, it sets out five fundamental principles and five standards for tax planning, and members must follow it. A failure to do so can lead to disciplinary action by their body.

PCRT is what draws the line between acceptable tax planning and conduct a professional body will not stand behind. For accountants and tax advisers it is not guidance to note and set aside; it is a binding standard.

What is PCRT?

PCRT is a shared code of conduct for tax work, prepared jointly by seven accountancy and tax bodies so that their members are held to the same standard. It applies to members and students of those bodies whenever they carry out tax work, and being familiar with and following it is a professional obligation, not an optional extra.

What are the five fundamental principles?

The five fundamental principles are integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour. They are the ethical foundations of all professional work, applied specifically to the tax context: acting honestly, without bias, with proper skill and care, keeping client information confidential, and behaving in a way that maintains the profession’s reputation.

What are the standards for tax planning?

Alongside the principles, PCRT sets standards for tax planning that mark out what members may and may not do. In essence, members must not create, encourage or promote tax planning that sets out to achieve a result contrary to the clear intention of Parliament, or that is highly artificial. It is this part of PCRT that responds to the era of marketed avoidance schemes.

Why does PCRT matter to clients?

For a client, PCRT is a reason to trust a regulated adviser: it means the person advising them is bound to act with integrity and to steer away from planning that would fall foul of anti-avoidance rules such as the GAAR. An adviser working to PCRT is far less likely to lead a client into an arrangement that later collapses.

Where fee protection fits

Even entirely proper tax affairs can attract an HMRC enquiry, and defending one costs professional time. Tax investigation insurance covers those fees, so a client’s accountant can respond fully. If your practice wants to protect its clients, see our accountants’ scheme, or read about professional indemnity for accountants.

Related guides: fee protection and professional indemnity, explaining fee protection to clients.

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