Advisers warned against VAT 'safety net' of splitting charge

Legal & General (L&G) distribution director, Danny Wynn, says some fee-charging firms have already begun splitting their charges to ensure clients and HMRC are aware which parts of the service are liable for the tax. But Russell Warwick, distribution strategy director at Prudential UK, warns this would mean some customers are unnecessarily charged VAT, which is set to jump from 17.5% to 20% next January. Joint guidance issued last week by HMRC and the ABI attempted to clarify the VAT liability of advisers’ remuneration. Advice only is taxable, it confirmed, while arranging the purc...