Tax bills for research under MiFID II are expected to hit £40 million a year, according to documents released by the Office for Budget Responsibility (OBR).
Released alongside the Autumn budget, the research also stated that the government is expected to bring in £45 million a year by 2021/22.
MiFID II requires the unbundling of research payments from execution commissions or commission sharing agreements, whereby the costs will then be subject to VAT from 3 January 2018 when the regulations come into force.
The forced unbundling of research and execution commissions is among the most controversial parts of MiFID II.
A large number of buy-side firms, including JP Morgan Asset Management, M&G and PIMCO, have decided to absorb the costs.
Earlier this year it emerged that Her Majesty's Revenue and Customs (HMRC) was consulting with Investment Association and other industry bodies on the tax implications around the incoming regulations.