7IM has become the latest platform to announce the removal of VAT charges from its Managed Portfolio Service (MPS).

The price changes will come into effect as of 1 February 2021 and apply to the model portfolios available to Financial Planners through the 7IM platform as well as third party platforms.

7IM follows a growing number of providers removing VAT from their Managed Portfolio Services, recently including Brooks Macdonald and AJ Bell.

The decision to remove VAT follows industry discussions with HMRC about the requirement to add VAT to MPS products with HMRC indicating it is not required. Other firms which have now removed VAT from MPS investment products include Brewin Dolphin, Tilney Smith & Williamson and Investec.

The changes mean the 7IM Active and Passive model portfolios will have an all-in cost of 0.25% going forward, while the Bespoke model portfolios range between 0.25%-0.30%.

The 7IM Pathway model portfolio range remains at a total cost of 0.15%.

Verona Kenny, managing director of intermediary at 7IM, said: “We are delighted to announce that we will be removing VAT from our Active, Passive, Pathway and Bespoke model portfolios from 1 February 2021. The removal of VAT will make our already competitively priced model portfolio service even more compelling for advisers, and importantly will provide a direct benefit to end clients.

“Despite challenging conditions, we have continued to innovate and enhance our proposition to respond to the needs of advisers and their clients. Over the past 12 months, this has led us to reduce the charges on our Sustainable Balance Fund, launch the 7IM Pathway Funds and deploy various platform upgrades which has resulted in record monthly flows onto our platform over 2020.”