Taxation Technical Committee

Representing the consumer and how tax can impact income, savings and investments

Industry challenge

The UK’s tax regime in relation to savings, investments and pensions products is complex and subject to constant change. Tax law, and changes, are often used as an influencer of consumers’ behaviour, either incentivising them to save, or incentivising them to direct their savings into a particular market channel or product type, or towards a particular asset class.

The tax regime, both in its application and its exemption, can be slow, clumsy and be very difficult to understand and apply. There is also a regrettable trend towards complex tax incentivised savings, to the detriment of consumer, and industry’s willingness and ability to take advantage of changes often set out to achieve desired political objectives.

Group purpose

The Taxation Technical Committee represents the consumer and how tax can have a negative impact on income, savings, and investments. TISA is in a strong position to advise HMT, HMRC and their advisers on how proposed changes to tax law will affect the industry and consumers to warn of potential unintended consequences.

Areas of focus

  • We have been engaging with HMRC on a potential problem affecting investment and savings platforms. From 1 January the EU rules don’t apply, affecting investment and savings platforms. This would have a significant adverse affect on their business models. We raised the issue with HMRC, had a very constructive set of meetings with them and they have now published Guidance for firms, after discussing business models, to make the position clear.
  • The group chair is stepping down and we have 2 volunteers (for Chair and Deputy Chair) to take over
  • Improving consumer access to financial guidance
  • The group continues to keep a ‘watching brief’ on many areas of taxation and is discussing the content and potential speakers for a future Taxation conference
  • TISA responded to the HMT Consultation on VAT Reform where we made recommendations to widen its scope. Following this, we have discussed next steps with HMT and with HMRC, which are now restarting their review of VAT on Financial Services. TISA had recommended zero rating for financial services
  • The working group will be looking at issues relating to taxation of capital gains and dividend income for customers investing in funds outside ISAs
  • We have identified issues arising from guidance that unauthorised funds are to be treated as funds and therefore need registration as a trust – linking to the work in Financial Crime
  • Work to produce a new Best Practice Guide in relation to US withholding tax has now been completed

Participating member firms

Aegon UK PLC
Bank of Ireland
CMC Markets Investments Limited
CMS Cameron McKenna Nabarro Olswang LLP
Delta Financial Systems
Embark Platform
Financial Software
Hargreaves Lansdown
JPMorgan Asset Management

L & G plc
Raymond James Investment Services Limited
RBC Brewin Dolphin
Royal Bank of Scotland
Secure Trust Bank Plc
SIX Financial Information
St James’s Place Wealth Management
Technical Connection

Sophie Legrande-Green, Policy Executive, leads on this work at TISA

Co-Chairs: Maarten Van der Hoeven, abrdn and Alex Ranahan, Financial Software

If you are a TISA member who would like to get involved with the Taxation work, please get in touch

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