UK investment firms will be faced with a larger VAT bill in 2018 due to MiFID II regulations. While there are many benefits to asset managers and their clients with the rapidly approaching MiFID research unbundling regulations, this tax burden will also be included when measuring the value of research. According to The Trade, the Office for Budget Responsibility is indicating that the 2018 tax bill could be £40M.
"MiFID II requires the unbundling of research payments from execution commissions or commission sharing agreements, whereby the costs will then be subject to VAT from 3 January 2018 when the regulations come into force." - The TRADE team
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