Platforms have ruled out following Standard Life ’s lead and paying their clients’ 2013 rebate tax bill.
Standard Life this week agreed to pay all its customers’ platform rebate tax liabilities for 2013 after admitting it was surprised by HM Revenue & Customs’ decision to tax platform rebates.
The move sees Standard pay all liabilities for the rest of the year relating to rebates on both Standard Life Wrap and FundZone.
Standard says it will pay HM Revenue & Customs directly which will mean clients do not have to include the income in tax returns and avoid the added paperwork.
Nucleus, Skandia, Ascentric, Alliance Trust Savings, Cofunds, Aviva, Transact and Novia all say they will not be following Standard Life in the move.
Axa Elevate says it currently has no plans to pay clients tax but will keep the situation under review.
Nucleus chief executive David Ferguson says: “Nucleus will not be following suit, while we are disappointed that HMRC has clarified the position as it has, income tax is a matter of personal responsibility and not a liability which should be funded by platforms.”
Skandia platform marketing manager Mike Barrett says: “The HMRC ruling was not a surprise to us, and as a result we had ensured our RDR ready platform launched in December last year was able to support paying rebates net or gross of basic rate tax.”
The Platforum managing director Holly Mackay says: “The really interesting bit of this story is the critical peer reaction. It just highlights how competitive platforms have become and how much asset movement they anticipate over the coming years.
”Whether this move was because systems could not cope or because of a genuine desire to help IFAs, I do not know.
“Surely the bottom line is that this is good for customers and helpful for IFAs and looks spookily like a life company acting quickly and in a commercially savvy way for a consumer benefit.”