HMRC rules fund rebates to consumers are taxable

HMRC has ruled it will tax fund rebates paid to consumers from April 2013.

In a statement, the Revenue said the payments made to investors are annual payments and therefore subject to income tax. The ruling means payments are subject to basic rate income tax, which will be deducted from trail commission. Higher rate taxpayers will then have to account for additional tax payments via self-assessment. The Revenue said: "The payments made to investors are (in tax terminology) 'annual payments' and therefore subject to income tax in accordance with S683 Income Tax (Trading and Other Income) Act 2005. "A consequence of this is that the payers are under an o...