Speaking at Cofunds’ future of retirement planning round table last week, Laverick said the move would be a threat to advisers and increase the cost of advice for consumers.
He said: “If remuneration is coming out of the product, it is not subject to VAT. If you were the Chancellor, surely you would be looking now at this pot. If we are going down the route of customer-agreed remuneration, it has to be a threat to us all. I am sure it would be sold on the grounds of consumer protection, not on revenue-raising. That is going to add up in terms of the cost to the client.”
Suffolk Life sales and marketing director John Moret agreed that such payments are a likely target. He said: “It is an anomaly in the system. I think that charging VAT on commission payments is the obvious route. The Treasury is hardly likely to take VAT away from fees to even the playing field.”