Platform and SIPP provider AJ Bell will remove the VAT charge from its Managed Portfolio Service (MPS) from 1 October.

The company says that VAT will be removed from AJ Bell’s annual management charge of 0.15%, reducing it from 0.18% to 0.15%.

AJ Bell follows a growing number of providers removing VAT from Managed Portfolio Services, including Brooks Macdonald recently. Providers have been removing VAT following discussions with HMRC.

AJ Bell says it is also preparing the launch of an ESG-style ‘Responsible MPS.’

The VAT axe will bring the total cost of AJ Bell’s passive MPS options to below 0.50%, inclusive of the MPS ongoing charges figure (OCF) and core platform fee of up to 0.20%.

The AJ Bell Investcentre core annual platform charge for SIPP, ISA and General Investment Account remains at 0.2%, reducing on assets over £1m.

The annual charge for the AJ Bell Retirement Investment Account remains 0.25% on assets below £500,000 and 0.2% on assets above £500,000.

The new Responsible MPS, to be launched in the next few months, will offer advisers a low-cost managed portfolio for clients who want diversified exposure to companies with strong environmental, social and governance (ESG) credentials, the firm says.

Kevin Doran, chief investment officer at AJ Bell, said: “These changes take all our Passive Growth MPS options below the 0.3% mark which means with our platform charge of 0.2% for our SIPP, ISA or General Investment Account, advisers now have access to a suite of risk-managed portfolios, on platform, at less than 0.5% per annum.”