Hargreaves Lansdown has moved to officially challenge HM Revenue & Custom's (HMRC's) decision to impose a tax on platform rebates paid to consumers, after the revenue's move to introduce the tax earlier this year.
In a statement, Hargreaves Lansdown said it had consulted with legal counsel and was now pursuing an official challenge to the rebate tax.
Hargreaves Lansdown chief executive Ian Gorham (pictured) said the introduction of what the group is calling a 'discount tax' is "extremely disappointing news and an attack on the small investor".
"The 'discount tax' is anti-competitive. Loyalty bonuses have been hugely popular with investors and helped them save money on investing in their favourite funds. We have saved investors over £1bn in the form of discounts and loyalty bonuses, helping clients benefit from lower costs," he said.
He said loyalty bonuses go straight to the investor without any need for them to be declared on a tax return, or shared with HMRC.
IFAonline's sister title Investment Week revealed in March HMRC had decided to tax rebates paid to consumers, on the grounds they are annual payments.
Hargreaves - which has been considering legal action since the rebate tax was announced - said its legal challenge is expected to take many months.
‘Important to have an anchor’
Report to be written by TPR
Lack of innovation for solutions
Some 2,000 consumers affected