Fund Management

HMRC Drops Platform VAT Charges

Stephen Little Reporter London 7 February 2014

HMRC Drops Platform VAT Charges

HM Revenue and Customs has decided not to impose VAT on platform service charges following a consultation last October.

HM Revenue and Customs has decided not to impose VAT on platform service charges following a consultation last October.

According to draft guidance obtained by WealthBriefing, while primary platform services will be VAT exempt, other platform services, including charges for advice, information, and research and market data services, will be liable to VAT at the standard rate. HMRC said that the primary service the platform supplies in return for this fee is made up of:

-The aggregation of the investors’ capital to bulk purchase securities in funds and other investment products.

-The recording of the transactions and holdings;
-The holding of the investments in trust as nominee, and
-The disaggregation of the income from the holdings, including realisation of the assets, in accordance with the individual beneficiaries’ investments.

“In its review of the operation of investment platforms, HMRC is consulting on an informal basis with industry representatives as part of this process. We are not focusing the review on any particular aspects of the operation of these platforms, and all areas are under consideration, including the different charging structures used by these platforms for the provision of portfolio management services," HMRC said in a statement.

HMRC said last March that tax fund rebates received by platform clients were liable to income tax.


Register for WealthBriefing today

Gain access to regular and exclusive research on the global wealth management sector along with the opportunity to attend industry events such as exclusive invites to Breakfast Briefings and Summits in the major wealth management centres and industry leading awards programmes