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VAT on fund management costs

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In an update in relation to VAT recovery on fund management services for defined benefit pension schemes following the judgment in PPG Holdings C-26/12, HMRC has extended for a further 12 months, until 31 December 2016, the transitional period during which a pension fund and employer may continue to apply a 70/30 asset management/administration costs split. This extension is largely to reflect HMRC’s latest view, set out in Revenue & Customs Brief 17/2015: Deduction of VAT on pension fund management costs, that direct payment by the employer under a tripartite contract will not give rise to a corporation tax deduction. The brief also sets out HMRC’s views on VAT recovery where pension trustees supply scheme administration services to an employer, and where the trustee and employer are in a VAT group. See

Issue: 1283
Categories: News