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Aifa guide explains VAT on fees

Aifa is offering a guide explaining to IFAs when fees are subject to VAT.

It says it is publishing the guide to dispel the misconception that fees are always subject to VAT.

The move follows discussions with HM Customs & Excise to “seek clarity on a complex area”.

Aifa says arranging life, pensions and investment products and mortgages is an “exempt supply service” regardless of whether remuneration takes the form of fees or commission.

When advice or information is integral to an “exempt supply” and not separately identified, it is not subject to VAT.

But when the advice itself is given on a stand-alone basis with an identifiable charge it will attract VAT.

It also explains that if a distinction is made between advice given and the sale of an investment or insurance contract it is VATable up to the point where the client decides to proceed with the advice and the contract is effected.

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Strong dollar can be a powerful driver of UK dividend growth in 2015

By Robin Geffen, fund manager and CEO 

This year threatens to be a challenging one for UK dividend hunters. Last year saw an all-time record amount paid out in UK dividends — some £97.4bn, according to research from Capita Dividend Monitor. Yet as Capita also pointed out, out the biggest single factor driving the growth in the fourth quarter of last year was easy to identify: the rising US dollar. 

In our view, this trend is much more than simply a one-quarter phenomenon. It is actually the most profound issue to get right as a UK equity income investor in 2015. We believe that the US dollar will continue to strengthen significantly from its current level. This is due more to the US economy’s demonstrable de-coupling from the rest of the world than to a view on the UK. The US has a strong chance of tightening monetary conditions this year without jeopardising growth or de-stabilising its housing market. The same can unfortunately not be said about the UK.

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