The Personal Finance Society (PFS), in conjunction with consultants Engage Partnership and following lengthy discussions with HMRC, has produced a paper outlining the applicability of value added tax (VAT) on a number of advice scenarios, including ongoing services.
The PFS's latest Professional Directions paper clarifies which services offered by a financial adviser are VAT-able, following confusion about when the tax would apply. It confirms that whether a service is liable for VAT or not depends on the actions of the adviser: if at any point the adviser has acted between a product provider and customer with a view to arranging a product sale, the adviser charge will be VAT exempt, regardless of whether a sale is finalised. Put simply, general financial advice is taxable; intermediation is exempt. Intermediation, if transacted through a platfor...
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