HMRC has revised its guidance on VAT exemption for fund management services in light of several European Court of Justice (ECJ) rulings on cases concerning pension companies, ATP and PPG
The first HMRC brief sets out its position following the ECJ decision in ATP Pension Service A/S v The Skatteministeriet (Case C-464/12). In this instance, the Court found that a pension fund which pooled investments from a number of defined contribution occupational pension schemes qualified as a Special Investment Fund (SIF) for the purposes of the VAT exemption for fund management services.
Before this, HMRC did not consider pension funds of any kind to be SIFs and therefore treated services provided in connection with all types of pension fund as falling outside the VAT exemption for fund management services.
In light of the ATP judgment, HMRC now accepts that pension funds matching certain characteristics are SIFs for the purposes of the fund management exemption so that the services of managing and administering those funds should be, and always should have been, exempt from VAT.
In a second brief, issued today, HMRC Brief 43/14 sets out the tax authority's latest position in connection with the decision of the ECJ in Fiscale eenheid PPG Holdings BV cs te Hoogezand v Inspecteur van de Belastingdienst/Noord/kantoor Groningen (Case C-26/12).
This follows from HMRC Brief 6/2014 which set out HMRC’s initial reaction to the judgment and takes into account the recent ECJ decision in ATP Pension Service A/S v The Skatteministeriet (Case C-464/12).
As a result of the ECJ ruling on PPG, HMRC has changed its policy on the recovery of input tax in relation to the management of pension schemes such that that there are circumstances where employers may be able to claim input tax in relation to pension schemes where they could not do so previously.
HMRC Brief 44/2014 on the ATP ruling is available here: https://www.gov.uk/government/publications/revenue-and-customs-brief-44-2014-vat-treatment-of-pension-fund-management-services/revenue-and-customs-brief-44-2014-vat-treatment-of-pension-fund-management-services
HMRC Brief 43/14 on the PPG ruling is available here: https://www.gov.uk/government/publications/revenue-and-customs-brief-43-2014-vat-on-pension-fund-management-costs/revenue-and-customs-brief-43-2014-vat-on-pension-fund-management-costs