 Pension funds need to act
The NAPF (National Association of Pension Funds) is taking a case jointly with Wheels Investment Management Services (the pension fund for Ford, Jaguar and Land Rover) to the UK VAT Tribunal claiming that pension fund management should be exempt from VAT. The claim arises out of the European Court of Justice decision last year in JP Morgan that investment trust companies should have the same VAT exemption for fund management as do OEICS and authorised unit trusts. NAPF is claiming that this decision should apply to other collective investment schemes such as pensions. If their case is successful, it could mean large VAT repayments to pension funds.
Although initially the case will be heard before the VAT Tribunal, it is likely that it will ultimately be resolved in the European Court of Justice. As this means the final decision will be some years away, it is important for pension funds and pension fund managers to protect their position in the interim. This is because there are strict time limits on making claims. PKF would be happy to provide advice on this.
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