Twitter icon Email alerts icon Latest News RSS icon Magazine icon Stay connected:

View the article online at http://citywire.co.uk/wealth-manager/article/a701656

Hargreaves launches legal challenge against HMRC over rebate tax

by Jun Merrett on Sep 09, 2013 at 12:18

Hargreaves launches legal challenge against HMRC over rebate tax

Hargreaves Lansdown has launched a legal challenge against HM Revenue & Customs' (HMRC) decision to tax rebates.

In April our sister publication New Model Adviser® revealed that the execution-only platform had asked a QC to review the ruling following HMRC's decision that rebates constituted annual payments and were subject to income tax which it began collecting from 6 April. 

The company has now moved to launch legal action against the taxman, which is expected to last months.

Ian Gorham (pictured), chief executive of Hargreaves Lansdown, branded the tax a "discount tax" and attacked its impact on the company's loyalty bonuses.

'The introduction of the "discount tax" was 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,' he said.

'We have saved investors over £1 billion in the form of discounts and loyalty bonuses, helping clients benefit from lower costs. Money that has gone straight to the investor without any need for it to be declared on a tax return or shared with HMRC.

'We feel it’s important to take a stand on behalf of investors. When we introduced loyalty bonuses we consulted on its tax position and it was clear, as a refund of charges, it should not be subject to taxation.'

Hargreaves said if its legal challenge is successful it will add this provision back into clients' accounts where applicable.

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

Long time coming: is the recovery here to stay?


Ian McVeigh and Steve Davies, managers of Jupiter's UK Growth fund, talk about their predictions for the UK equity space. Click here to watch a series of sponsored interviews with Jupiter's fund managers on the UK equity market.

Today's top headlines

More about this:

Look up the shares

  • Hargreaves Lansdown PLC
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them

More from us

Archive

On the road

Click here to find out more from the Audience Development team.

Sorry, this link is not
quite ready yet