HM Revenue and Customs will go back to court with Hargreaves Lansdown as it appeals a multi-million pound judgement on loyalty bonuses for investors.
In March, Hargreaves successfully defended its position over the so-called “discount tax”, arguing that rebates of annual charges, such as loyalty bonuses, paid on funds held outside Isa or Sipps should be allowed to be passed back to investors tax-free.
HMRC changed its rules on returning discounts in April 2013. Hargreaves had been paying loyalty bonuses for at least 15 years before this, but they would now be taxed as income and paid net of the basic rate tax, and would have to be declared on tax returns.
Hargreaves has postponed all payments while the tax position is clarified.
Hargreaves claimed it would be able to collectively return £15m to around 150,000 investors as a result of the ruling, but HMRC has now decided to appeal the March tribunal judgment.
The appeal is now due to run until the first half of next year.
Hargreaves Lansdown chief executive Chris Hill says: “The discount tax has always been an unnecessary and unwarranted attack on private investors…We see no reason why we would not be successful at appeal.”