Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

Hargreaves launches legal challenge against HMRC over rebate tax

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 or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Brewin's Gutteridge: Yuan direction

Brewin's Gutteridge: Yuan direction

This week Brewin Dolphin's research head chats to Fidelity Asian Investment Directors Jenny Lee and Gary Monaghan about the big changes in China.

Play On the Road Challenge: horsing around on the polo pitch

On the Road Challenge: horsing around on the polo pitch

Libby Ashby takes to the polo pitch with Stuart Leigh-Davies from Redmayne-Bentley for an 'On the Road' challenge.

Brewin's Gutteridge: where Miton's Godber sees value

Brewin's Gutteridge: where Miton's Godber sees value

This week Brewin Dolphin's research head talks to George Godber, co-lead fund manager of the Miton UK Value Opportunities fund, about value investing.

Your Business: Cover Star Club

Profile: what tempted Brewin's Glasgow team over to Rathbones?

Profile: what tempted Brewin's Glasgow team over to Rathbones?

Rathbones’ Glasgow office has only been open for three months but the team, led by Angus Kerr, has already attracted new clients

Wealth Manager on Twitter