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HMRC issues additional rebate tax guidance


HM Revenue & Customs has issued additional guidance about when tax is payable following questions over the tax treatment of rebates.

HMRC ruled in March that tax would be payable on platform rebates from 6 April.

In a guidance note, published yesterday, it confirmed payments from fund managers to life companies will not be taxable, stating “they are not ‘pure income profit’” when paid to a provider.

The guidance also confirms any trail payments made to advisers will not be eligible for income tax, but if payments are passed to clients then tax will apply.

The note also confirms HMRC’s approval of Standard Life’s decision to pay tax on behalf of clients.

The note says: “The entity making the annual payment may choose to bear the cost of the tax deducted to ensure that the policyholder receives the full rebate amount.”



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Case study: administration — implementing a management log

Our client is a leading video game and publishing company best known for its console role-playing game franchises. The client provides a number of benefits, at varying levels and cost that attract a P11d liability. With the absence of a management log to track data for benefit movements, enormous administrative and therefore cost implications were occurring each year just to comply with P11d reporting requirements.


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