Don't look VAT in anger: Is the MPS trend here to stay?

VAT operational issues explored

clock • 4 min read

After HM Revenue & Customs indicated VAT may not be necessary on top of model portfolio services, DFMs have been racing to remove the charge from their propositions. However, Jon Yarker investigates what’s happening with the trend and whether the tax will return

Over the past 12 months, DFMs throughout the UK have been removing VAT from their model portfolio services (MPS). This is an industry-wide trend and, according to NextWealth research from December 2020, 14 firms out of a sample of 30 had removed this tax.  In addition, at that time a further six firms were actively reviewing the issue and, since those figures were gathered, a further three firms have ditched VAT on their MPS. This highlights a significant contrast from 2019, when NextWealth found all discretionary fund managers (DFMs) charged VAT (except for one that included this tax in...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Tax planning

Thousands of NHS workers yet to take McCloud tax action

Thousands of NHS workers yet to take McCloud tax action

Research reveals a gap of more than 30,000 between NHS Pension Scheme members

Isabel Baxter
clock 23 October 2026 • 3 min read
Budget Media Watch: Farming IHT U-turn looks less likely

Budget Media Watch: Farming IHT U-turn looks less likely

Farming minister says matter ‘now settled’

Jen Frost
clock 23 October 2026 • 2 min read
CGT receipts hit £1.13bn amid Budget speculation

CGT receipts hit £1.13bn amid Budget speculation

Questions raised over investor behaviour

Isabel Baxter
clock 21 October 2026 • 2 min read