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Monday
Sep202010

New Guidance Makes VAT on Fees Easier to Understand

A good example of an area that has proved confusing when it comes to IFAs (independent financial advisers) is the payment of VAT on fees. This is why HMRC has taken the step of issuing some clarifying guidance that should help erase any confusion.

The issue concerns fees charged by advisers, and whether or not they should be subject to VAT. The rule states that if advice is given on its own, it should be subjected to the payment of VAT. However if that advice leads to a sale of a financial product, there shall be no VAT payable.

It is therefore very important that all IFAs understand the distinction between the two. This will ensure that the proper fees are paid and the IFAs do not get a nasty shock when a VAT bill arrives for more than they had estimated further down the line.

It is always important to ensure you fully understand the rules regarding all aspects of taxation. This is where the regular help of a qualified accountant can be of use to you. If you are unsure of anything you can ask for assistance and ensure that the proper taxes and fees are paid at the right time.

Here at St Matthew we always take pride in helping all our clients with their VAT and tax issues. Contact us now if you need any advice .

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