Aviva and Financial Software Ltd (FSL) join forces to enhance tax reporting

• Excess Reportable Income (ERI) to be made available to advisers
• Further enhancements, including ‘What If’ CGT calculations in the pipeline
• Aviva committed to supporting tax planning as central part of advisers’ role

Aviva and FSL have announced a joint agreement to provide enhanced tax reporting capability from FSL, delivered through Aviva’s adviser platform.

Under the joint agreement, ERI reporting will soon be available for advisers using Aviva’s adviser platform, powered by FSL’s market-leading tax calculator technology, CGiX.

This is the first of a series of technical integrations delivering enhanced tax solutions, that will be available on the platform during the coming months. Also on the roadmap for delivery this year is a Capital Gains Tax (CGT) ‘What if’ scenario builder.

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. These investments have become far more widely used with the rising popularity of Managed Portfolio Solutions (MPS) - 72% of which have offshore funds. However, historically it has been difficult to report taxable income accurately and consistently. This has the effect of leaving clients at risk of reporting wrongly or not at all, and in these circumstances they can be liable to hefty HMRC penalties. Because of this, some advisers limit the number of funds they consider for a client’s investments, in order to avoid a potential tax mis-reporting issue.

Al Ward, Head of Aviva’s Adviser Platform, comments:

“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.”

The Aviva adviser platform already has a CGT calculator built into the adviser toolkit. The new technology integration announced today will build on those capabilities and in the longer term introduce more of FSL’s CGiX suite of products, such as the ability to perform CGT ‘What If’ calculations.

Michael Edwards, Managing Director of FSL, comments:

“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.”

About FSL

FSL (Financial Software Ltd.) provides specialist investment tax solutions that simplify the process of management, analysis, and reporting. The firm has a proven track record for developing market-leading products since 1994, including CGiX, the industry’s award-winning capital gains calculator.  

Having initially focused on software, FSL leveraged its expertise to meet the demands of a changing market and evolved its offering to include financial services data. In addition to CGiX, its other solutions include a comprehensive database of corporate actions that supports its products and is also used for offshore investment and excess reportable income. And ETHiX, an ESG modelling software which lets users create an accurate picture of ESG performance and advise on sustainable investment strategies. The team also offers tax and data consultancy services to some of the UK’s largest banks and wealth firms.  

Wealth managers, banks, accountancy firms, and platform providers rely on FSL to alleviate the pain of investment tax, allowing them to deliver a more accurate and efficient service for their customers. As the pace of digital transformation accelerates, FSL is powering the transition to wealth management 4.0 through ongoing innovation and an in-depth understanding of investor expectations.

FSL is part of Industrial Thought Ltd., the parent company for a group of companies shaping the future of financial technology and data products.