HM Revenue & Customs is investigating whether platform charges should be subject to VAT, according to the Money Marketing website.
The article on http://www.moneymarketing.co.uk says that HMRC may seek to tax a wider range of platform charges after rebates became subject to income tax back in April. One option that has been floated among the platform industry is making fixed platform costs liable to VAT.
Money Marketing goes on to say ‘sources’ have told them that HMRC has held talks with industry representatives, including trade groups and platform bosses, with a view to publishing clarified guidance on tax treatment of platform charges.
At present, admin charges are subject to VAT, although few platforms classify any of their charges as admin. It is understood HMRC wants to clarify that fixed-cost platform charges should be considered as admin fees and therefore be VATable.
HMRC have said that discussions are at an early stage but confirmed it was looking at the ways platforms operate and the possible VAT treatment of platform charges.
A spokesman said: “HMRC is currently reviewing the operation of investment platforms with the intention of expanding their guidance on the VAT treatment of the charges they make. As part of this process, industry representatives are being consulted on an informal basis and the new guidance will be agreed with them before it is 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.”