Banking

Thorntons Investments scraps VAT charges on MPS

The move will see an investor’s £200,000 portfolio better off by £2,000 over a five-year period, the firm said.

The decision to remove VAT follows an industry review from HMRC and while several firms have already stopped charging VAT on MPS propositions, Thorntons has claimed to be the first to extend it to its AIM model portfolio.

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David Holmes, head of business development at Thorntons Investments, said: “Removing VAT from our MPS felt like a natural step that we were always planning to take, but given how core AIM is to our proposition, we were keen to ascertain if it should be removed from this model too.

“AIM continues to be a global success story in Britain, benefitting promising smaller businesses and investors alike. Having maintained a close dialogue with HMRC and other specialist advisers, we now know that removing VAT is the best thing for those invested in our services.”

He added, however, that the process was not without its challenges, owing to a lack of guidance surrounding VAT specifically in the context of AIM.

“As platform availability continues to open up, we hope to see HMRC issuing more definitive guidance around the treatment of VAT when it comes to AIM, in turn encouraging others to follow suit,” Holmes said. “This, we hope, will mean more people can cost-effectively take advantage of AIM as part of their inheritance tax planning.”

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