Loyalty bonus payments by a platform service provider to investors were not liable to the deduction of basic rate income tax at source, as they did not satisfy all the criteria for being ‘annual payments’.
In March 2013, HM Revenue and Customs (HMRC) announced (in its Brief 04/13) that from April 2013 it expected financial intermediaries making certain payments to investors to deduct basic rate tax at source from such payments (with investors being expected to declare any higher rate liability on the payments in their returns).
The appellant, a ‘platform service provider’ to investors, did not accept that this obligation applied to ‘loyalty bonus’ payments, which it made to investors. HMRC and the appellant reached a temporary agreement to avoid the necessity of multiple appeals. Under that agreement, the appellant would retain an amount equal to the basic rate of income tax on the payments to
