Company Launches Legal Challenge to UK Rebate Tax

By Editorial 12 September, 2013

A British investment company has launched a legal challenge to the taxation of "loyalty bonuses" paid by fund supermarkets to investors, after HM Revenue and Customs decided earlier this year that such payments amount to taxable annual payments.

HMRC rejected a comparison with cashback rebate schemes relating to debit, credit, and shop loyalty cards on the grounds that the money paid to investors is derived from a "trail commission" paid to fund supermarkets by the investment companies that operate investment funds.

Fund supermarket Hargreaves Lansdown condemned the move as "anti-competitive," and it is now taking HMRC to court over what the company describes as a "discount tax."

CEO Ian Gorham was quoted as saying that for most individual investors the tax would be less than GBP10 per annum, but that his company was committed "to getting the very best for our clients." He explaind that the company had saved investors over GBP1bn through discounts and loyalty bonuses.

Tags: Tax | Financial Services | United Kingdom | HM Revenue And Customs (HMRC) | HM Revenue And Customs (HMRC) | Individual Income Tax | Services | Expats |


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