PKF: HMRC could be liable for millions

HM Revenue & Customs (HMRC) could be liable for millions of pounds in repayments following last year's European Court of Justice ruling in a case favouring JP Morgan, that fund management of venture capital trusts (VCTs) should have been exempt from VAT since 1990, says accountants PKF.

HMRC is applying a three-year cap on claims but after an earlier ruling from the House of Lords this year, HMRC says it will also meet claims for overpayments made between January 1, 1990 and December 4, 1996 as long as they are lodged before April 2009, according to MoneyMarketing.

‘This is a great result for VCTs and shows that HMRC are applying VAT exemptions too narrowly in certain areas. The good news for investors is that this should increase the value of the funds in which they are invested,’ Debbie Jennings, PKF VAT director, said.

Meanwhile, the National Association of Pension Funds is taking a case with the pension fund for Ford, Jaguar and Land Rover to the UK VAT Tribunal, claiming pension fund management should be exempt from VAT following the JP Morgan ruling.

Further reading:

Pension funds body urges VAT challenge

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