Pension / VAT Law Update

ATP Pension Services judgment

Fees for managing a defined contribution pension fund may be exempt from VAT. This was the decision of the Court of Justice of the European Union (“CJEU”) in the recent landmark case of ATP Pension Services. Here, the CJEU deemed that such fund arrangements may qualify as ‘special investment funds’ in EU law. This allows fees for managing the fund to be exempt from VAT in the event that:

  1. The scheme is funded by the members;
  2. The funds are invested on a risk-spreading basis; and
  3. The members bear the investment risk.

The full judgment can be found here

Implications of the judgment

The CJEU’s judgment will have an impact on all businesses that make or receive supplies in respect of defined contribution schemes. 

Moreover, the judgment is likely to be retrospective. This will lead to fund managers – at the behest of pension trustees – making claims to HMRC for significant VAT refunds.

HMRC is expected to release guidance on the CJEU’s decision in the coming days. Nevertheless, we recommend that action be taken now in anticipation of any refund claims.

How can we help?

At DWF, we have a specialist Tax team ready to assist you with your claims for overpaid VAT.

We offer a free initial consultation and have a number of funding options available to you.

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.