TaxCorporate TaxDate set for Customs vs JP Morgan battle

Date set for Customs vs JP Morgan battle

Date set for multimillion-pound VAT battle between a JP Morgan-owned investment trust and Customs & Excise.

A date for a multimillion-pound VAT battle between a JP Morgan-owned investment trust and Customs & Excise has been set for early May, Accountancy Age has learned.

Link: Battle lines drawn in GLO fight

JP Morgan Fleming Calverhouse Investment Trust, which counts former Tory trade secretary and shadow chancellor Peter Lilley as director and has assets of more than £315m, will lock horns with Treasury QCs on 9 May.

The Association of Investment Trusts, which will offer support and has instructed Paul Lasok QC to fight its corner, said the case is worth between £30m and £40m a year for the industry. By the time a decision is handed down, the Treasury could be facing an initial bill in the region of £200m.

Ian Sayers, technical director at the AITC, said the case was, in financial terms at least, ‘probably the biggest thing we have ever done’.

‘If you think about it in terms of £30m-£40m every year, which can then be re-invested, the cumulative effect can be huge,’ said Sayers.

About 120 investment trusts have agreed to share the costs of the case. The case concerns whether VAT should be charged on the management fees of investment trusts.

Authorised unit trusts and Open Ended Investment Companies are exempt from VAT, leading to the accusations of ‘discrimination’.

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