Advisers must charge VAT for pensions work

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Nick Huber
Freelance journalist
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Financial advisers that help employers set up and manage group personal plans must add VAT to their consultancy fees, HMRC has confirmed.

HMRC said in a briefing note that employee benefit consultants and others providing services to employers for the setting up and administration of workplace contract-based pensions will need to establish the exact nature of the service, and the recipients of that advice.

“Businesses that advise and assist employers in relation to the setting up and/or ongoing administration of group personal pensions should...

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25th Apr 2013 15:10

VAT can be avoided

As HMRC say; VAT won't apply in every case where a fee is charged for financial advice, including that in respect of pensions.

Where you ask for advice with the intention to make an investment, pension or otherwise, even if you don't go through with it, the supply of services will be exempt.

Further, where you sign up for ongoing reviews which may lead to you investing more in your pension or changing existing arrangements the cost of this advice will too be VAT exempt.  

For individuals and exempt businesses avoiding VAT is important at they won't be able to reclaim it if charged. I would expect most financial advisors to be on the ball about this.

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