Clifford Chance

VAT and Pension Fund Management – the new guidance

29 May 2015

On 26 March 2015, HMRC published Revenue and Customs Brief 8 (2015),
relating to the deduction of VAT on pension fund management costs. The Brief provides new guidance on the conditions in which employers can reclaim VAT charges in relation to pension fund management services provided in respect of defined benefit (DB) pension schemes.

Unfortunately, the guidance does not sit well with the regulatory environment applicable to DB schemes, and complying with it verbatim could have unintended effects. In our view, there are reasonable ways of working within the guidance, but care needs to be taken to ensure that the perspectives of the various interested parties (investment manager, employer and trustees) are considered.

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