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 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.
News sponsored by:
As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.
Today's top headlines
From Nigeria to Pakistan and from Kenya to Kuwait, frontier markets are catching investors' attention as never before.
More about this:
Look up the shares
More from us
On the road
on Jul 31, 2014 at 10:36