Within the last two weeks, AMI and AIFA, the IFA trade body, have banded together to fight off VAT claims sent to two intermediary networks. The networks, thought to be an IFA and a mortgage firm, still have the 30-day appeal period to dispute the charges which Cummings said were extremely ‘case specific’.
But Cummings added: “It’s not just networks who could be implicated here, it’s any firm integral to the financial sales process. But this has a long way to run and won’t be resolved in the next few weeks.”
Florence Palmer, spokesperson for HM Customs, who maintained only one letter had been sent out, said: “Although we see this particular ruling as being specific to the taxpayer involved, we are obviously keen to hear from other parties that feel they may be affected. If it becomes clear that this decision has wider application, we will disseminate it to the relevant bodies with guidance on how it should be implemented.”
An industry insider said: “The amount of money we could be talking about here is huge. The industry is in a fragile position at the moment with all the new networks. You could look at this as a stealth tax on the property market.”
IFA network, Berkeley Berry Birch CEO Richard Howell, said: “The key to this is to remember the exemptions. If the sale of a product is involved, it’s VAT exempt.”
He added: “If networks are currently charging membership fees without VAT, they could be in for a nasty shock with retrospective charges.”
