HMRC have just issued Brief 11/2013 which announces changes to the VAT treatment of Portfolio Management Fees from 1st December 2013. However, intermediaries should consider their position now.
Following on from the 'changes' to income received by Financial Intermediaries as a result of the Retail Distribution Review, HMRC have announced a change in the VAT liability of certain Portfolio Management Fees from 01/12/13. Given that the VAT liability of intermediary services is (and has always been) dependent on what an intermediary does, this latest change serves as a further reminder that IFAs and other intermediaries really need to have their processes in place to determine whether their income is VATable or not.
You can find a link to VAT Brief 11/2013 here which explains that if the fee charged for buying and selling stocks and shares is part of a flat fee, then the whole fee is VATable.
It is worth all intermediaries checking that their terms of engagement and charging structures are such as to achieve VAT exemption.