TaxCorporate TaxPension trustees in VAT reclaims victory

Pension trustees in VAT reclaims victory

Capital Cranfield Trustees case opens door for trustees to claim back VAT when winding-up

Independent pension trustees will be able to claim back VAT on the fees
charged by professional advisers following a landmark tribunal decision.

Capital Cranfield Trustees Limited won its VAT Tribunal against HM Revenue
and Customs as the tribunal decided that a professional independent trustee,
with statutory powers that is registered for VAT, can claim a refund on the fees
charged by professional advisers in the course of winding-up.

The decision is likely to have major implications for pension schemes who are
in winding-up with an insolvent employer.

Previously only ongoing schemes have been able to reclaim VAT on professional
fees incurred by trustees. This decision provides an opportunity for trustees to
recover previously charged VAT and reduce the cost of administering a fund in
the future.

Ian Hyde, tax partner at law firm Pinsent Masons, said: ‘This case has wide
implications for independent trustees and how funds are administered. As VAT
reclaims can essentially only be made for the last three years, independent
trustees should be acting as soon as possible.’

There is still uncertainty, however, about which schemes can benefit. If
there are other trustees involved or if a trustee does not have statutory powers
it is unclear how the decision will apply.

This could allow the taxman to argue that the decision only applies in
limited circumstances.

Further reading:

Read the decision
here

Visit
Pinsent Masons here

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