The National Association of Pension Funds (NAPF) has urged its members to put
pressure on the taxman in a bid to force a VAT overhaul.
After a key ruling was handed down by the European Court of Justice affording
investment managers VAT relief on pension scheme services, the NAPF is pushing
for pension funds to jointly finance a legal challenge so that the same benefits
apply in the other direction.
NAPF chief executive Joanne Segars, said: ‘After the clarification from the
ECJ, there is a strong case that pension funds should not have to pay VAT on
investment management services. Instead, they would be able to use these savings
to benefit their members.’
The NAPF’s move has been made in response to the ECJ’s judgment on the
Claverhouse case, which found that VAT exemption should extend to investment
management services provided to occupational pension schemes.
The NAPF added: ‘Litigation is never without risk and it would be expensive
for any one pension fund to finance a legal challenge on its own. But if a
number of funds agree to share the costs, they could get their money back
several times over. Ultimately, it is for pension funds to decide whether they
want to challenge HMRC. If we get enough interest from our members, we will
co-ordinate a case.’
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