A tax provision introduced last year is likely to have an unexpected impact on brokers and other financial services intermediaries. The provision was intended to prevent taxpayers limiting their tax liability by diverting personal services income through companies, trusts or partnerships.

Intermediaries weren’t the target, but NIBA and the FPA both say their members will be directly affected. While it’s expected to mainly impact brokers who also hold a securities licence or have advisers within the brokerage who act as authorised representatives of other dealers, closer examination by experts is making them very nervous.

NIBA and the FPA are making a joint approach to the Government over this issue.