The initial draft guidance, issued in October, received positive feedback in most areas but was heavily criticised by some for being too discriminatory and over-prescriptive.

In response to this criticism, HMRC has revisited the guidelines and issued a revised version for industry review this month.

The guidelines largely maintain the status quo with respect to VAT exemptions.

VAT will still be chargeable if advisers are providing pure financial advice, but advisers’ services will be VAT exempt when their advice leads to a product sale.

Also, under the draft guidelines, if a customer agrees for an adviser to arrange a retail investment product, no VAT...