VAT rise may hit adviser transition to fees

According to Nick Cann, CEO of the professional body, advisers not used to charging clients a fee, possibly supplemented by a VAT charge, may be further deterred by the increase. Chancellor George Osborne this week said the standard rate of VAT will rise from 17.5% to 20% from 4 January next year. Current HMRC rules state VAT is applicable on top of an adviser charge if the service relates purely to financial planning, without a product recommendation. “For those businesses who know what they are doing, it is clear what impact the increase will have,” Cann says. “But firms for w...