New Chartered Institute of Taxation guidance is a major blow for the many agents of dubious quality professing R&D tax credit expertise.
Since being introduced in 2000, the market for R&D tax credit advice has matured. This maturation comes with its ups and downs. On the positive side, more businesses are benefiting from the incentive, with an increase in awareness across all sectors.
On the other hand, the lucrative nature of the incentive has drawn advisers who are only after a quick buck. To put it bluntly, it has become bit of a Wild West.
For businesses, it presents a quandary: R&D tax credits can have a transformational impact when done right, but how can you cut through competing claims, the dodgy stats and spurious advisers to get the help you need?
The answer is to work with advisers who follow proper professional guidelines, and the gold standard is the Professional Conduct in Relation to Taxation (PCRT) guidance. All members of a PCRT body – like the Chartered Institute of Taxation (CIOT) – must follow these standards.
Why PCRT matters to you
On June 1, new topical guidance tailored specifically to R&D tax credit advice was published by the PCRT bodies. This is big news for R&D tax credit advisory and businesses across the UK.
The PCRT guidelines set out five fundamental principles that members of the professional bodies must adhere to: integrity, objectivity, professional competence, confidentiality and professional behaviour.
All good things, I’m sure you can agree. In terms of R&D tax advice, there are three main points which the new topical guidance covers:
Regulatory expectations: The guidance confirms who is covered and which services. Any member of one of the PCRT bodies must follow the PCRT guidance. This also means that an R&D tax adviser should be meeting their regulatory obligations, such as anti-money laundering (AML) and GDPR compliance.
Behaviour: The principles of integrity, objectivity and professional behaviour govern the relationship between an adviser and their client. This includes obligations such as explaining risks to their clients, sharing documents, keeping records, and not making misleading claims on their websites or in marketing materials.
Competence: It may feel like stating the obvious, but in simple terms, the PCRT requires advisers to do all they can to get it right. A member must be competent to provide a specialist service, or they are not allowed to offer that service.
PCRT and beyond
To be clear, PCRT guidelines set out the minimum standards of behaviour and competence you can expect from a reputable adviser. When seeking an adviser for any tax affairs (including R&D tax credits) adherence to PCRT standards is the least you can expect.
If they aren’t a member of one of the PCRT bodies – and remember, tax advice is unregulated so anyone can offer it – alarm bells should ring immediately. Remember: If things go south, it’s ultimately you that will be on the hook. You must be able to trust the work that your adviser carries out on your behalf.
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