Aviva has joined forces with Financial Software Limited (FSL) to provide enhanced tax reporting capabilities via Aviva’s adviser platform.
Excess Reportable Income (ERI) reporting will soon be available for financial advisers using Aviva’s platform, which will be powered by FSL’s tax calculator technology CGiX.
Numerous technology integrations will be coming to the Aviva platform during the coming months, including a capital gains tax (CGT) ‘What if’ scenario builder due for release later this year.
The Aviva adviser platform already has a CGT calculator built into the adviser toolkit, but the new technology integration will build on those capabilities.
Aviva said: “It is compulsory for clients to report ERI, which is created when clients are invested in Offshore Reportable Funds where the profit has not been paid out as interest or a dividend.”
It added that these sorts of investments have become far more widely used with the rising popularity of managed portfolio solutions (MPS) as 72% hold offshore funds.
The British multinational insurance company also noted that “historically” it has been difficult to report taxable income accurately and consistently, which has resulted in clients being at risk of reporting wrongly or not at all.
This can result in a hefty HMRC penalty and some advisers limiting the number of funds they consider for a client’s investments.
Aviva’s adviser platform head Al Ward said: “Efficient and compliant tax planning and advice is an integral part of what advisers do. Historically, ERI reporting in particular has been an issue, principally because of the lack of both clarity around where information is kept and no required standard reporting mechanism.
“Our partnership with FSL has been driven by adviser demand, and will deliver some truly ground-breaking innovations, removing complexity from the process and in particular providing relevant tax reports in one place.
“This is the first in a suite of tax solutions aimed to make tax reporting much simpler for advisers, which will help their clients fulfil their tax reporting obligations more smoothly.
“Delivering best in market solutions, such as those offered by FSL, is a clear demonstration of our commitment to deliver for adviser firms and our desire to bring solutions to market that augment and enhance our core platform offer.”
FSL managing director Michael Edwards added: “We have been campaigning about the importance of accessible ERI reporting for some time, and we are delighted that this agreement with Aviva will provide a way for advisers to ensure that their clients have the necessary information to meet HMRC’s demands.
“This will only become more important in the future – HMRC are focusing on off-shore investments, and last year alone sent out 31% more ‘nudge’ letters than they had the previous year, so the consequences of getting this wrong are clear.
“The responsibility for reporting lies with the client, but advisers have told us it is a priority for them to help their clients in this regard.
“This functionality will provide a simple and transparent way to ensure advisers can support clients reliably and easily, and is a critical part of the services and support that advisers can offer.
“It provides much-needed transparency in an area that has been overlooked too often. We are delighted to be working with Aviva on this, and other, future tax-supporting services.”
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