Cash Management

Tax

Value added tax is charged at 20% on the stockbroker's commission. Thus, if your stockbroker charges you 1% , on a £10,000 deal you will pay £100 commission plus £20.00 VAT.

There has been a curious exception that where a stockbroker uses his own market-maker, the whole transfer is exempt, with the result that no VAT is charged at all. The Stock Exchange wants this anomaly removed, but, apart from a technical measure relating to underwriting capital issues, the Chancellor did not do so in the March 2024 Budget.

VAT charged on commission is generally not reclaimable, even if you are registered for VAT. Input tax is only deductible if the supply is related to the company's business. This is not so for private

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