HMRC hints at VAT charge for platform fees

HMRC is “reviewing” how it treats platform charges with a view to potentially introducing VAT on them.

The tax body is consulting with the platform industry “on an informal basis”, a spokesperson said, ahead of guidance about the VAT treatment of platform charges being published.

“The purpose of the review is to provide more detailed guidance in light of recent industry developments and not to change existing policy on the VAT treatment of platform charges,” the spokesperson said.

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It follows HMRC’s decision earlier this year to introduce a tax on fund rebates to investors - a move which triggered a scramble to cut fund prices further than the standard 75 basis point unbundled rate to remove the need for rebates altogether.