HMRC has extended for a further 12 months, until 31 December 2017, the transitional period during which a pension fund and employer may continue to apply previous HMRC policy allowing VAT recovery based on a 70/30 split between asset management and administration costs in relation to fund management services provided for defined benefit pension schemes.
HMRC’s latest position is set out in Revenue and Customs Brief 14/2016, which acknowledges that the further extension is necessary to allow time to reconcile the court decision with pension and financial service regulations, accounting rules and emerging case law.
HMRC announced its changed policy in February 2014, following the judgment in PPG Holdings [2014] STC 175, accepting broadly that employers may deduct input tax in relation to both scheme administration and investment management where the employer is a party to the contract for those services and has paid for them.
HMRC has extended for a further 12 months, until 31 December 2017, the transitional period during which a pension fund and employer may continue to apply previous HMRC policy allowing VAT recovery based on a 70/30 split between asset management and administration costs in relation to fund management services provided for defined benefit pension schemes.
HMRC’s latest position is set out in Revenue and Customs Brief 14/2016, which acknowledges that the further extension is necessary to allow time to reconcile the court decision with pension and financial service regulations, accounting rules and emerging case law.
HMRC announced its changed policy in February 2014, following the judgment in PPG Holdings [2014] STC 175, accepting broadly that employers may deduct input tax in relation to both scheme administration and investment management where the employer is a party to the contract for those services and has paid for them.
