PCRT January 2026 Update: What the New Standards Mean for Your R&D Claim File

Professional Conduct in Relation to Taxation, known as PCRT, is the joint ethical standard for UK tax professionals published by CIOT (Chartered Institute of Taxation), ATT (Association of Taxation Technicians), ICAEW, ACCA, ICAS, STEP, and CIPFA. It sets out how professional body members must behave when providing tax advice. From 1 January 2026, an updated version of PCRT came into effect, aligning the UK standards with revisions made by the International Ethics Standards Board for Accountants (IESBA) to its Code of Ethics in April 2024. The updated PCRT is published by CIOT and the other professional bodies. This page explains what changed and what it means for the quality of R&D advice you should expect from a professional body member.

What PCRT Is and Who It Applies To

PCRT has been in place since 1995 and has been updated several times since. The current framework contains five Core Principles (integrity, objectivity, professional competence, confidentiality, and professional behaviour) and five Standards for Tax Planning. All professional body members listed above must comply. Breaches can result in disciplinary proceedings through the relevant professional body.

In the context of R&D tax claims, PCRT is relevant because it governs how an adviser assesses a claim before filing it, what they must tell the client about risks, what records they must keep, and how they handle situations where the client wants to file a claim that the adviser considers unsupportable. These are exactly the situations that HMRC's compliance activity, including the Mandatory Random Enquiry Programme, most frequently exposes.

PCRT does not directly apply to R&D boutique firms that are not members of any of the listed professional bodies. However, the mandatory HMRC registration requirement from 18 May 2026 requires AML supervision, which for many firms means joining a professional body. Firms that join a professional body for AML purposes then become subject to that body's conduct standards.

What Changed in the January 2026 Update

The PCRT bodies described the 2026 update as aligning with IESBA's April 2024 revisions to its Code of Ethics on tax planning services. The structural core of PCRT was retained: the five Core Principles and the five Standards for Tax Planning remain. The update was described by the ICAEW in October 2025 as "not [adding] extra burdens" for members who were already following the existing standards.

The specific changes included:

New provisions on dealing with third parties

The updated PCRT added paragraphs on how advisers should deal with third parties. In R&D claims, the relevant third parties include HMRC itself (when the adviser is making representations), and other professionals involved in the claim (for example, a technical author who assists with project narratives). The new provisions clarify the adviser's obligations when making factual claims about technical matters on a client's behalf.

New provisions on disagreements with clients

The update also added guidance on how to handle disagreements with clients. In R&D advisory work, the most common disagreement is when an adviser believes a project does not qualify, or that a cost category is not eligible, and the client wants to include it anyway. The updated PCRT makes clear that a member who advises on a position they believe is incorrect, simply because the client insists on it, is in breach of their professional obligations. The adviser's obligation is to advise on the correct position and to document their advice. If the client proceeds against that advice, the adviser must consider whether to continue acting.

IESBA alignment on tax planning representations

The IESBA revisions focused on tax planning arrangements that rely on non-disclosure to HMRC, lack genuine commercial substance, or produce outcomes that conflict with the intent of the legislation. These provisions are less directly relevant to standard R&D claims, which are statutory reliefs with defined qualification criteria rather than tax planning arrangements. However, they are relevant to R&D claims that are structured in ways that stretch the rules, for example by artificially splitting projects, inflating costs, or characterising business-as-usual improvements as qualifying R&D.

The Five Standards for Tax Planning

The five Standards for Tax Planning in PCRT set out the framework within which any tax planning advice, including R&D claims, must be given. They have been part of PCRT since 2017. The 2026 update reinforced rather than replaced them.

Standard 1: Client specific

Advice must be tailored to the specific client and their circumstances. An R&D adviser cannot apply a generic template to every client's claim without assessing whether the client's actual activities qualify. Project descriptions that are identical across multiple clients, or that describe a generic type of R&D rather than what the specific company actually did, fail this standard. A PCRT-compliant adviser will insist on detailed project information before drafting narratives, not draft them from a template and ask the client to confirm.

Standard 2: Lawful

Advice must not involve breaking the law. For R&D claims, this is a basic threshold: the adviser must not assist with claims for activities that clearly do not qualify, or with fabricated or inflated cost schedules. The harder application is to borderline cases: an adviser who gives confident advice on a qualification issue they have not properly analysed is at risk of advising on a claim that is not lawfully supportable.

Standard 3: Disclosure and transparency

All necessary information must be disclosed to HMRC. For R&D claims, this means the Additional Information Form must contain accurate and complete information. It also means that where there is a borderline qualification issue, the adviser should not structure the project description to obscure that uncertainty from HMRC. Where an issue is genuinely arguable, the adviser should advise the client on the risk and, in some cases, consider seeking advance assurance rather than filing a claim and hoping HMRC does not challenge it.

Standard 4: Tax planning arrangements

Advisers should not advise on or assist with arrangements that lack a genuine commercial basis or that rely on HMRC being unaware of their nature. In the R&D context, this applies to arrangements such as artificial contracts structured to allow a contractor to claim instead of the company that bears the cost, or related-party transactions designed to generate qualifying expenditure that does not represent genuine R&D spend.

Standard 5: Professional judgement and appropriate documentation

Advisers must apply professional judgement and keep appropriate records. This standard has direct implications for how an R&D claim file should be documented. A PCRT-compliant adviser should be able to produce a file that shows: how each project was assessed for qualification, the technical sources relied on, the cost methodology and apportionment calculations, any borderline issues identified and how they were resolved, and the basis for the adviser's opinion. If HMRC opens an enquiry, that file is the evidence of how the advice was given.

What This Means for Your Claim File

For a company commissioning an R&D claim, the practical implication of PCRT is that a professional body member adviser is supposed to maintain standards that protect both the company and the integrity of the claim. Here is what a PCRT-compliant R&D claim process looks like:

Engagement letter

The adviser should issue a written engagement letter before starting work. This sets out the scope of the work, the client's obligations (including providing accurate information), the adviser's obligations, and fee arrangements. An adviser who starts work without an engagement letter is not following professional standards.

Technical assessment per project

For each project included in the claim, the adviser should document why they believe the project qualifies. This means identifying the field of science or technology, specifying the advance being sought compared to the existing baseline, and identifying the scientific or technological uncertainty. This assessment should be recorded in writing, not kept only in the adviser's head. If HMRC later asks why a project was included, the adviser should have a documented answer.

Cost methodology

The cost methodology should explain how staff time was apportioned, how consumables and software costs were attributed to R&D versus non-R&D use, and how any subcontractor or externally provided worker costs were calculated. The methodology should be specific enough that someone else could follow it to reach the same figures. See the eligible expenses categories for the rules on each cost type.

Named officer briefing

A PCRT-compliant adviser should ensure that the named officer at the company has been briefed on the claim content and their responsibilities before the AIF is submitted. Presenting the completed AIF to the named officer only on the day it needs to be filed, without time for genuine review, does not meet the spirit of either the named officer requirement or PCRT.

Borderline issues documented

Where the adviser has assessed a project or cost item and concluded that it qualifies, but the position is not straightforward, that analysis should be in writing. The client should understand the risk level. For high-value borderline items, the adviser may recommend seeking advance assurance before including them in a claim.

What to Ask Your Adviser About PCRT Compliance

If you want to verify that your R&D adviser is operating within the PCRT framework, ask them the following:

• Are you a member of CIOT, ICAEW, ACCA, or ATT? If so, your claim is covered by PCRT. If not, ask what conduct standards apply to their work.
• Can you show me the technical assessment for each project in my claim? A compliant adviser will have one. An adviser who cannot show you the reasoning is not meeting Standard 5.
• For any borderline qualification issue: what is the basis for concluding this qualifies? What is the risk if HMRC disagrees?
• What does your claim file contain and can I have a copy? The claim file should be yours. You are the taxpayer and the named officer is responsible for the claim. You are entitled to understand what you are signing off on.
• What is your complaints and disciplinary process? A professional body member will have a clear answer. An unaffiliated firm may not.

PCRT and the Wider Compliance Context

PCRT operates alongside the other compliance changes introduced since 2023. The full picture for 2026 is:

• PCRT updated from January 2026 with stronger provisions on third-party dealings and client disagreements
• Mandatory HMRC registration from 18 May 2026 requiring AML supervision and a clean tax record
• Additional Information Form mandatory for all claims since August 2023
• Named officer requirement on the AIF creating company-side accountability
• MREP as an ongoing random sampling exercise measuring overall compliance levels
• Targeted advance assurance pilot available from 18 May 2026 for borderline qualification issues

These measures together mean that the bar for adviser quality has risen materially. An adviser who meets all these standards is operating in a completely different way from the free-form advice market that existed before 2023. For companies choosing an R&D adviser, the combination of PCRT membership, HMRC registration, and a documented claims process is the minimum standard to look for.

Uplift Tax introduces companies to specialists who meet these standards. See how the introduction process works, or request a free assessment to discuss your claim.