VAT & Pension Funds
The complex VAT rules applying to pension funds have been clarified recently, with HMRC updating their internal manuals and issuing Revenue and Customs Brief 3 (2017).
It can be very important that advisers, sponsors, pension providers, trustees, beneficiaries and fund managers are aware of the correct VAT liabilities on services they provide, and what the rules are as to how much and who can recover input tax.
What You Will Learn
This introductory level short webinar will cover the following:
Why does VAT matter?
- For Funds: Changes in VAT incidence can have material basis point effects, getting the VAT liability and deductions correct can have material effects on balance sheet and profit and loss accounts, especially for larger funds or those in deficit
- For Sponsors: Optimising VAT recovery on services to pension funds can reduce funding costs
- For Pension Providers and Trustees: It is important to ensure in respect of VAT charged on services provided to funds, that input VAT deduction is optimised, within the rules acceptable to HMRC
- For Providers: Getting the liability correct on fund management services you provide is vital, improving client confidence and your competitive offering
How VAT applies to pension funds and how its incidence can be optimised within the HMRC rules:
- Types of pension fund: DB and DC, Individual and collective, and how the interaction matters for VAT purposes
- Type of fund management: investment and administration management, asset allocation and stock selection
- VAT liability of fund management to DB and DC individual and collective funds
- Insurance backed funds and pension fund management provided by insurers
- Optimising VAT incidence: exemption for collective DC funds, type of trustee, deduction of input tax including separate administration contracts to sponsors, VAT grouping, tripartite contracts and conditions for recovery, use of the 70:30 simplification