The FSA should put pressure on HM Revenue & Customs to produce a clear guide explaining when financial advice is liable for VAT, according to The Ideas Lab director Roderic Rennison.
Speaking aboard the Aurora yesterday at the PIMS conference, Rennison said unless the regulator forces the issue with HMRC, uncertainties around when to charge VAT on advice and when not to will persist.
Rennison said: “The FSA must lean upon HMRC to provide meaningful and definitive VAT guidance for the profession, by which I mean not just intermediaries but suppliers, life companies, fund management groups, platforms, software suppliers, and above all distributor firms.”
He advised IFAs to speak to their tax adviser or accountant to clarify their position and to get any recommendations related to VAT charging in writing.
Rennison added: “If you have not registered for VAT yet and plan to do so you should take advice in the manner in which you do that. Talk to your inspector, as firms seem to be facing the prospect of a retrospective VAT bill due to the suspicion that might arise around why a firm is registering for VAT now when they have not been registered before.”