TaxAdministrationVCTs in line to regain £30m in VAT

VCTs in line to regain £30m in VAT

VCTs are in line to regain £30m in VAT after government decided to allow past three years' of claims

HM Revenue & Customs (HMRC) has said it would meet back claims over a
three-year period, which could amount to an estimated £30m, and also excempt the
funds from VAT from October 8, according to investment trust trade body, the
Association of Investment
Companies
.

Ian Sayers, deputy director general at the AIC, told the Financial
Times
, the move to exempt VCTs from VAT acknowledged their role in the
financial system. ‘Venture capital trusts make an important contribution to the
economy by investing in smaller, potentially high-growth businesses that promote
innovation, industrial change and modernisation of working practices,’ he said.

HMRC’s announcement came after Treasury plans which will enable investment
trusts to invest in bonds and other interest-bearing assets tax-efficiently.

The ruling was welcomed by AIC as a measure which could help trusts better
balance their portfolios and help manage risk.

Further reading:

PKF: HMRC could be liable for millions

Read
the Financial Times story

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