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AMI voices concern over KFIs

The trade body is worried the rules covering the calculation of inducements could be misinterpreted, particularly the definition of what payments are regarded as material and must be disclosed.

It states confusion also reigns over the issue of packager payments. Current thinking suggests packagers are out-sourced processors of mortgage cases, working for either a lender or an intermediary.

The view seems to be that a lender will pay the packager for its out-sourced services and make a separate payment to the intermediary for writing the business.

AMI says that if this is the case, packagers will need to be aware that payments from lenders for outsourced work could attract VAT.

Sue Cox, business development manager at packager Bananas Inc, says: “We are currently taking advice on what business is classified as requiring VAT payment. There is a frightening number of brokers who do not seem aware of this and are not quite prepared for Mortgage Day.”

AMI has also issued a challenge to lenders to reveal what progress they have made with their KFIs, calling for them to publish test systems this month.

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