United Biscuits: VAT exemption for non-insurers

The VAT treatment of investment management fees incurred by defined benefit pension funds has once again been considered by the High Court. On this occasion, in United Biscuits, the issue at stake was whether investment management services provided by non-insurers should benefit from the exempt treatment for such services provided by insurers. The court rejected this argument. The policy in this area has been under review for some time. In April 2017, HMRC announced that the policy of allowing insurers to exempt the provision of insurance management services would be withdrawn with effect from April 2019. HMRC is expected to publish a comprehensive review of the VAT treatment of pension funds in the near future and this will hopefully bring clarity and consistency to the treatment of funds.