On 14 April 2026, ICAEW’s Council approved an update to the ICAEW Code of Ethics which will come into effect on 1 July. The 2026 edition includes new provisions relating to tax planning, and clarifies the role of professional accountants.

New sections on tax planning

The updated Code now includes an entirely new section for members in business (section 280) and one for members in public practice (section 380).

• Tax planning activities are defined as “advisory activities designed to assist an employing organisation in planning or structuring its affairs in a tax-efficient manner”.
• Tax planning services are defined as “advisory services designed to assist a client, whether an individual or an entity, in planning or structuring the client's affairs in a tax-efficient manner.”

The revisions confirm that the role of practitioners is “to use their expertise and experience to assist their employing organisations or client in achieving their tax planning goals and meeting their tax obligations”.

The provisions recognise that when professional accountants provide such assistance, this might involve certain tax minimisation arrangements that, although not prohibited by tax laws and regulations, might create threats to compliance with the fundamental principles.

The new sections set out potential self-review, self-interest and advocacy threats to compliance with the fundamental principles, that may arise when professional accountants advise on (or recommend) a tax planning arrangement. Examples of actions that may be taken to mitigate or eliminate such threats are provided.

• More guidance for those working in businesses
• More guidance for those working in practice

What are the requirements?

Before advising on, or recommending a tax planning arrangement, the new provisions require professional accountants to:

• Familiarise themselves with relevant tax laws and regulations (including those that might be referred to as anti-avoidance rules, or that limit or prohibit certain tax planning arrangements).
• Advise the employing organisation or client to comply with relevant tax laws and regulations.
• Obtain an understanding of the proposed tax planning arrangement (including its purpose, facts and circumstances and ultimate beneficiaries).
• Apply the “credible basis test” (see below).
• Stand back and consider the wider reputational, commercial and economic consequences of the proposed tax planning arrangement.

When engaging in tax planning activities or services, professional accountants are expected to:

• apply professional competence and due care;
• have an inquiring mind; and
• exercise their professional judgement. 

They must also be aware of, and comply with, their obligations under the provisions of the Code that deal with .

Where there is uncertainty about whether a tax planning arrangement is in compliance with relevant tax laws and regulations, the practitioner is required to discuss the uncertainty with management or the client, and (if appropriate) those charged with governance.

Those subject to the Code of Ethics are encouraged to document, on a timely basis:

• their analysis of the tax planning arrangement (including its nature and purpose, and ultimate beneficiaries);
• areas of uncertainty, the judgements made and courses of actions considered;
• their determinations and conclusions; and
• their discussions with management or the client.

The credible basis test

The new sections stipulate that a professional accountant can only advise on (or recommend) a tax planning arrangement, if they have first determined that the proposed arrangement has “a credible basis in laws and regulations”.

The new sections set out examples of the actions that a professional accountant might take to determine whether a credible basis exists in relation to a particular tax planning arrangement. These include:

• reviewing relevant facts and circumstances, including the economic purpose and substance of the arrangement;
• reviewing the relevant tax legislation and legislative proceedings that discuss the intent of the relevant tax legislation;
• reviewing relevant court decisions, professional or industry journals, and tax authority rulings or guidance; and
• considering whether the basis used for the proposed arrangement is an established practice that has not been challenged by the relevant tax authorities. 

Practitioners may also consider consulting with legal counsel or other experts, and with the relevant tax authorities, where applicable.

Should the accountant become aware of circumstances that might impact their previous credible basis determination, they are required to reassess the validity of that determination.

Should the accountant consider that there is no credible basis for the proposed tax planning arrangement, they should:

• inform their superiors or the client;
• explain the basis of their conclusion; and
• potentially recommend an alternative arrangement which does have a credible basis.

Reputational, commercial and wider economic consequences

In addition to determining whether a tax planning arrangement has a credible basis, the new provisions require the exercise of professional judgement and consideration of the reputational, commercial and wider economic consequences that could arise from the way stakeholders might view the arrangement.

The new sections provide examples of the matters to be taken into account as part of the consideration of “reputational and commercial consequences”. These include implications impacting on the reputation and business of the employing organisation, the profession or the client, arising from a prolonged dispute with the relevant tax or other authorities, such as:

• adverse publicity,
• costs, fines or penalties,
• loss of management time over a significant period, and
• potential adverse consequences for the employing organisation or client.

The new sections also provide examples of the matters to be considered as part of the consideration of “wider economic consequences”. These include:

• the accountant’s general understanding of the current economic environment and the impact of the tax planning arrangement on the tax base of the jurisdiction, or
• the relative impacts of the arrangement on the tax bases of multiple jurisdictions, where the employing organisation or client operates.

Relationship with PCRT

ICAEW members are required to comply with Professional Conduct in Relation to Taxation (PCRT).

PCRT sets out ethical standards in relation to tax matters which are wider than, but which include tax planning.

In January 2026, an updated version of PCRT came into force. PCRT was updated to achieve broad alignment with the new tax planning revisions in the Code of Ethics which come into force in July.

ICAEW considers that compliance with PCRT will satisfy a member’s ethical obligations in relation to UK tax planning and related services.

In limited circumstances relating to tax planning in multiple jurisdictions, members will also need to refer to the provisions of the updated Code.