The Tax Incentivised Savings Association is writing to Treasury economic secretary Sajid Javid in an attempt to delay the implementation of HM Revenue & Customs taxation on platform rebates until April 2014.
HMRC announced in a briefing note on Monday that unwrapped rebates paid from 6 April 2013 will be taxed.
Tisa wrote to all platforms this week to assess the costs to the platform industry of making changes, which it estimates at up to £25m.
Tisa met with HMRC on Tuesday to discuss the difficulties of implementing changes. It would require an amendment to the Finance Bill to allow for a 12 month delay to rebate tax implementation.
Tisa technical director Jeffrey Mushens says: “HMRC and the Treasury have been helpful with this but have made it clear that we would need ministerial consent to allow for a 12-month delay to rebate tax.
“A 12-month delay would allow most investments to be moved into clean share classes which would eliminate much of the problem. We hope Sajid Javid will listen to our concerns.”
Tisa says HMRC estimates suggest it would recoup around £4m a year through the taxation of rebates.
Money Marketing reported earlier this month that platforms were calling for rebate tax to be implemented in April 2014 alongside FSA platform rules.
As a result of the HMRC interpretation, Skandia and Standard Life Wrap are both considering fundamental changes to their rebate models.
An HMRC spokesman says: “HMRC is working very closely with the industry to ease the transition to the rules. Until the end of 2013 to allow the rules to bed in we will accept an estimate of tax deducted at source.
“We continue to talk to all stakeholders to address any questions they may have and are very grateful to all those in the industry who continue to engage with us in a open positive manner.”