01/11/2011 - HMRC Confirms No VAT IF Product Sold
HMRC Confirms No VAT IF Product Sold.
HMRC has outlined what it considers to be the seven stages of the advice process.
The first 4 are:
* Gathering information about the customer
* Carrying out research on suitable investment options
* Providing the customer with reports, financial health checks and forecasts
* Advising the customer on the best investment options.
If at this stage the client agrees to go ahead with the transaction, the advice process is VAT exempt. However if the customer wishes to receive an advice-only service that does not require the adviser to arrange any exempt transactions, then the service of the adviser will be taxable.
HMRC lists the remaining 3 stages of the advice process as implementing the agreed options, monitoring the customer’s position to ensure products continue to meet customer’s needs and rebalancing.
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