VAT recovery and pension schemes: Where are we now?

HMRC’s policy on reclaiming VAT on investment management and other costs remains under review in the light of two recent decisions from the Court of Justice of the European Union.

The first of these cases, PPG Holdings, relates to defined benefit schemes. Although the ruling itself appeared helpful for employers, HMRC’s current interpretation of it is restrictive and could effectively increase overall pension scheme costs for sponsors of DB schemes. The second case, ATP PensionService , relates to the administration of defined contribution schemes. HMRC has yet to respond formally to this case.

Updated guidance on VAT treatment in the light of both judgments is now expected in autumn 2014. Current arrangements where the pension scheme is invoiced for services under HMRC’s previous practice, as expressed in VAT Notice 700/17 (the 70:30 split arrangements) can continue until the new guidance is issued. A further transitional period is likely to be allowed from that point.

This briefing summarises the current position, including areas of uncertainty, and highlights points for schemes and sponsors to consider in advance of new guidance being published.

Please see full article below for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Allen & Overy LLP | Attorney Advertising

Written by:


Allen & Overy LLP on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.