Platforms confident of VAT exemption
Nucleus says it has received confirmation from HM Revenue & Customs that platform fees and rebates will not be subject to VAT.
In November, the FSA published a consultation paper on delivering the RDR, which defined platforms as providing administration services rather than distribution services, sparking fears that VAT could apply to platform fees and rebates.
Nucleus chief executive David Ferguson says: “We have had an HMRC investigation and it is satisfied that Nucleus is exempt from VAT. Platforms principally arrange investment and as a result are exempt.”
Novia chief executive Bill Vasilieff is also confident that VAT will not apply. He says: “We have taken advice on this from an accountancy firm and we have been told we are exempt. As a financial intermediary service, VAT does not apply.”
Fidelity International head of UK fund partners Ed Dymott says: “We do not see there being a situation where platforms’ operations will be VAT-able.”
In February, Ernst & Young warned that the FSA’s defin- ition of platforms as providing administration services could see VAT applied to platform fees and rebates. E&Y director of financial services Malcolm Kerr says these concerns still stand.
HMRC says its work on VAT and platforms forms part of a wider consultation and it is therefore unable to comment on any progress.
On March 29, the Tisa distribution advisory council hosted a meeting with HMRC, Deloitte, Fidelity and a number of advisers to discuss VAT and adviser-charging.
Council chair David Hazelton says there is still confusion over VAT and has called for an amnesty for firms who have not been charging VAT. He says: “We need a tax amnesty for retrospective business so the industry can engage with HMRC in an open way and decide which practices are liable for VAT.”
- The beginning of the end for Scottish financial services?
- First line of defence: Is the Govt using advisers to ward off another pension transfer scandal?
- Standard Life sets out contingency plans ahead of Scottish independence vote
- Cameron issues plea to Scots on independence as fund groups pull cash