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Mortgage brokers hit by VAT on MCCB fees

Mortgage brokers have been hit by the Mortgage Code Compliance Board adding VAT to fees.

The sales staff fee has gone up from £85 per consultant to £100, the registration fee has risen from £20 to £23 and the fitness and propriety fee is now £117 from £100. This makes the total cost per sole trader £240 compared with £205 previously.

Almost all brokers are VAT-exempt so they cannot reclaim any of the costs.

Riach IFA proprietor Bob Riach is questioning the validity of the increase, saying he is not convinced that the mortgage code is working because the public is not aware of its existence.

Mortgage club Mortgage Intelligence managing director Sally Laker says: “I think the poor old brokers are in a Catch 22 situation. It must be annoying that they cannot do anything about claiming back the VAT.”

MCCB spokesman Brad Baker says: “Customs & Excise regularly reviews the VAT that we pay and our VAT burden has increased by 77 per cent over the past few years.

“Last year, we absorbed the increase but we cannot do that in the long term. We informed all firms about the increase in December.”

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