Canaccord Genuity scraps VAT on MPS

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Canaccord Genuity scraps VAT on MPS
Jason Alden/Bloomberg

Canaccord Genuity Wealth Management (CGWM) has become the latest firm to remove VAT from its model portfolio services (MPS).

The firm said the tax was removed from both its direct and platform MPS last month. 

It highlighted the recent HMRC ruling last June where Tatton was permitted to remove VAT from its MPS, adding that prior to that it was required to charge 20 per cent VAT in addition to management fees on these services which include its MPS, ESG portfolio service and its passive portfolio service.

Paul Parker, head of MPS at CGWM, said: “Following a successful negotiation with HMRC after this recent ruling, we are delighted we are now able to remove the VAT from fees on all our risk-profiled portfolios - MPS, ESG and passive. 

“This makes investing with CGWM an even more compelling proposition for IFAs and their clients, as they will continue to receive an extremely high standard of service, but for better value.”

VAT scrapping

The ruling last June by HMRC that Tatton did not have to charge the tax on its MPS, along with a £1.7m refund from the taxman, triggered a slew of other firms scrapping the tax.

Brewin Dolphin stopped charging VAT on its service in October, while in November FTAdviser revealed both Investec and Quilter had removed VAT from their respective MPS.

Since then, Parmenion, Brooks MacdonaldHSBC  and others have decided to get rid of the tax charge.

Most DFMs are seeking an individual ruling from HMRC on whether VAT is payable on their MPS, though the taxman has now told multiple firms to ‘self assess’ the situation.