HMRC amends policy to allow DB employers to recover VAT on certain investment activity costs - .PDF file.
By Michael Cant
HMRC has published a briefing (Brief 06/14) stating its revised policy on the ability of sponsor employers to recover input VAT incurred in the management of defined-benefit (DB) pension schemes. This policy has been updated to implement the recent ruling in PPG Holdings BV.
Albeit grudgingly, HMRC now accepts there is greater scope for DB pension scheme employers to reclaim input VAT on the costs of investment management services where they are provided alongside administration services. This may result in a material saving for scheme employers who can offset this against their output VAT.
Employers may also be entitled to reclaim significant amounts of overpaid VAT where they have been invoiced for both management and investment costs in the last four years and should consider making any such claims as soon as possible…
Click on the link below to read the rest of the Nabarro briefing.