Pensions strive to win VAT parity
12 May 2008
A bid to gain a tax rebate on pension funds is to be announced today in an attempt to secure the same VAT treatment for pension funds as other investment funds. The legal move follows a favourable ruling in a similar judgment last year by investment trusts in the European Court.
If successful, the legal challenge would permit pension funds to claim back around £300m in backdated VAT from the last three years, as well as save pension funds £100m a year in future VAT payments.
The case will be brought by £8bn multi-employer scheme Wheels Common Investment Fund and the National Association of Pension Funds. Presented initially to the UK VAT and Duties Tribunal, the case may later be referred to the European Court of Justice.
A successful challenge would benefit scheme members by cutting costs and increasing money for investment.
