IESBA has updated its code of ethics to include detailed commentary on ethical requirements in relation to tax planning and related services. IESBA’s code of ethics forms the basis for ICAEW’s own ethical code. As a member of the International Federation of Accountants, ICAEW must alter its ethical code to reflect the changes made by IESBA.

IESBA’s ethical code includes a new requirement for accountants in business and practice giving tax advice to consider the reputational, commercial and wider economic consequences of that advice. Guidance is provided on a number of areas, including: the accountant’s responsibilities in giving tax advice; identifying and addressing areas of uncertainty; and documenting the advice given. The changes take effect for tax planning services beginning after 30 June 2025. Early adoption of the provisions is permitted.

Prior to the changes, IESBA’s ethical code did not include detailed commentary on tax advice. ICAEW, along with other UK professional bodies and associations, has adopted the Professional Conduct in Relation to Taxation (PCRT). The PCRT has been in place since 1995 and was strengthened in 2017 in response to the Government’s request that the professional bodies took greater responsibility in helping to curb tax avoidance.

In its May 2023 response to IESBA's proposed revisions to its code, ICAEW noted that the PCRT and IESBA’s proposed guidance were “substantially similar in effect”, although IESBA’s code adopts a very different drafting style to the PCRT. ICAEW will be exploring with fellow PCRT bodies how the PCRT requirements and IESBA’s final pronouncement can be reconciled in a way that maintains the well-established and understood nature of the PCRT in relation to UK matters.