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Aipedia: Tax advisers
The PCRT AI guidance tells tax advisers how existing ethical principles apply to AI tools; it adds no new rules but makes clear members stay accountable. It is likely to be a reference point in disciplinary and negligence disputes.
Part of: AI in Tax advisers
In short
On 19 January 2026 the seven PCRT bodies (AAT, ACCA, ATT, CIOT, ICAEW, ICAS and STEP) issued topical guidance on the ethical use of AI. It supplements PCRT rather than creating a new standard. It maps AI risks onto the five Fundamental Principles: transparency about AI use, avoiding automation bias, treating output like a junior colleague's work, checking that cited cases and legislation exist, and not putting client data into public tools without consent. It includes 16 scenarios and recommends an audit trail. It works alongside the updated PCRT that applies from 1 January 2026 and does not mention PI insurance.
The guidance followed a 2025 consultation and was announced by CIOT on 19 January 2026. The text is available from ICAEW and as an AAT PDF. Paragraph numbers on this page follow the AAT copy.
| Document | Status | Date |
|---|---|---|
| PCRT (updated) | Binding ethical code for members of the seven bodies | Tax work from 1 January 2026 |
| PCRT Topical Guidance on AI | Guidance supplementing PCRT, not a separate standard | Published 19 January 2026 |
| CCAB draft Statement on ethical AI | Exposure draft | June 2026 |
| HMRC registration conditions | Legal requirement; no AI content | Checked October 2026 |
The guidance says it is "not intended to be technical guidance on the use of AI". It applies to members in practice, in business and in the public sector working on UK tax matters, and "member" includes firms and their staff.
Members should be transparent about using AI and able to explain how a conclusion was reached. Para 1.3 recommends "including an appropriate statement in the engagement letter" and considering whether to disclose actual AI use when work is delivered. Para 1.6 makes members responsible for work by staff under their supervision, which matters where junior staff use AI tools without telling anyone. Two scenarios cover exactly that: a firm not telling clients about AI use, and staff using AI without disclosing it internally.
Objectivity is usually discussed in terms of conflicts. Here it means guarding against bias in the tool and "automation bias", the tendency to accept a confident machine answer without question. Members should understand what data sources a tool relies on, because that affects whether its answer can be trusted for a UK tax point.
This section carries the most practical weight:
For a deeper look at checking authorities, see AI tax research and fake case law.
Para 4.2 states that inputting client data into public AI tools "is likely to constitute a breach of client confidentiality" without client consent. Para 4.4 points to anonymisation, para 4.5 warns that control of data is lost and that it may be retained or stored overseas, and para 4.6 asks firms to build data handling into policy and refers to the ICO. Scenarios compare a free public tool with an internal one, and cover third-party data held under an NDA. See client data in AI tools.
Members must comply with the law, avoid negligent work and avoid contrived planning, and correspondence with HMRC must stay professional. The scenarios include an AI report recommending an aggressive scheme and AI-drafted HMRC letters with an unprofessional tone. The Standards for Tax Planning continue to apply in full.
The guidance recommends an audit trail of AI tools used, and keeping downloaded webpages and screenshots of prompts as evidence of reasonable care. The 16 scenarios also cover relying on AI-generated client data, AI meeting transcription and summaries, tax software running without human review, and a client asking that AI not be used.
The updated PCRT applies to tax work from 1 January 2026, aligned with the IESBA tax planning standard that took effect on 1 July 2025. It adds disclosure of relationships with third-party tax planning providers (paras 2.7 to 2.8), applies PCRT to second opinions (2.15) and covers credible-basis disagreements (3.8 to 3.10). The Taxation Disciplinary Board applies the PCRT version in force when the incident occurred, and helpsheets are being updated over the coming year.
The guidance does not mention PI insurance, but it is likely to become the benchmark for what reasonable care with AI looks like. In a negligence claim, an adviser who can show the steps in paras 3.4 and 3.5 and a clear audit trail is in a stronger position. The CIOT/ATT PII Regulations already require cover for all civil liability from tax services, so AI-related negligence would usually be handled like any other claim, subject to the wording. For the wider picture see the tax advisers AI hub, does PI cover AI tax advice errors, and what to document about AI use. Accountants can compare the ICAEW, ACCA and CCAB guidance.
Apex arranges PI for tax advisers. A broker can review whether your wording, proposal answers and engagement letters line up with the way your firm now uses AI.
It is topical guidance that supplements PCRT, not a separate standard. PCRT itself is binding on members of the seven bodies, and the guidance explains how its Fundamental Principles apply to AI. A disciplinary panel would be likely to treat it as evidence of expected conduct.
Members of AAT, ACCA, ATT, CIOT, ICAEW, ICAS and STEP working on UK tax matters, whether in practice, in business or in the public sector. The guidance says "member" includes firms and staff, so it reaches the whole team, not just the qualified principal.
An audit trail of which AI tools were used, plus downloaded copies of relevant webpages and screenshots of prompts. These are described as evidence of reasonable care, which is useful both for disciplinary purposes and when defending a negligence claim.
No. The guidance does not mention PI insurance. The CIOT/ATT PII Regulations still apply, requiring firms of members in practice to carry cover for all civil liability arising from tax services, with minimum limits based on fee income.
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