It has previously been requested and highlighted by firms and its members providing R&D Tax advice that there are a number of areas where they would appreciate clarity on the application of Professional Conduct in Relation to Taxation (PCRT) to their work. Members having any involvement with R&D Tax Credits have a responsibility to comply with the Fundamental Principles and the Standards for Tax Planning which are outlined in the PCRT and the Rulebook.
Tax advisors have a responsibility both to their clients, the professions reputation and the wider public interest. The PCRT helps to outline the standards and principles which can help to achieve this.
Many Accountants are already aware of the PCRT guidance. Many businesses however, are not as familiar with it and its fundamental principles. The 5 main principles that members of the professional body must adhere to are: integrity, objectivity, professional competence and professional behaviour.
Businesses and individuals rely on the advice and guidance from professionals and the above principles are in place to provide them against receiving bad advice. To receive advice there are 3 main areas to which the topical guidance covers:
The guidance outlines those who are covered and the services. Any member of the PCRT bodies (ATT, AAT, ICAEW, ICAS, ACCA, STEP, CIOT) must follow and adhere to the PCRT guidance. This rule also applies to any advice which relates to a company’s R&D tax relief claim and must be following the PCRT guidance. Therefore any R&D tax advisor should be meeting their regulatory obligations such as GDPR compliance and anti-money laundering (AML).
The PCRT includes that all advisors should attempt to do their absolute best to provide the best service to their clients and to get their clients claims right. Any member of the above governing bodies must be competent to provide such a specialist service (such as R&D) or they are not allowed to offer such service. The guidance highlights that R&D tax is a specialist service area and requires an in depth level of training and CPD.
The principles of integrity, objectivity and professional behaviour govern the relationship between an adviser and their client. The guidance clearly outlines how advisers should behave and operate when dealing with their clients and their personal information and to not misrepresent themselves through personal brand marketing. The over arching theme here being responsible with data and transparent as an adviser in your abilities, strengths and weaknesses.
Since being introduced in 2000, R&D tax credits and the need for R&D tax advice has increased significantly as businesses continue to understand the requirements and benefits. This has opened doors for advisers to broaden their portfolio of abilities but has highlighted the need for specific knowledge on the R&D Government scheme. When taking over claims from other provides who don’t specialise in R&D tax credits, we’ve seen on a number of occasions where claims haven’t included all qualifying expenditure or understood the HMRC rules.
The PCRT has been put in place to help prevent advisers who are trying to reap the benefits themselves without actually producing a ‘good’ claim for their clients. Many advisers don’t understand the technical narrative and understanding needed to produce a successful claim and in the process of attempting to do so could prevent their clients from receiving their full funding amount.
Overall, the new PCRT guidance has helped to highlight to both advisors and clients how niche R&D actually is and how it requires a specialist team almost purposefully built who specialise solely in R&D to fully complete a success claim to its full potential.