Today I am letting you know about yet another volte-face by HM Revenue & Customs. I apologise that this will only affect a small number of you but to those few this is of paramount importance.

Any of you working in the highly regulated pensions’ sector will know how complicated the whole issue of VAT has been over the last few years. Those of you who either work specifically in VAT or who follow recent court cases will not be surprised to learn that the latest change comes about as a result of a Court of Justice case.

Prior to the judgement in the ATP Services case, HMRC did not accept that any pension fund qualified as a Special Investment Fund (SIF). As a result of the judgement they now accept that, where certain conditions are present, a pension scheme does qualify.

HMRC Brief 44/2014 confirms that if the pension fund is funded by the person who will ultimately benefit, that person bears the investment risk, the fund contains pooled investments of several pensioners and the investment risk is spread over a range of securities, the fund will qualify as a SIF.

So what? It may be that certain of the services in respect of the fund’s administration may now qualify for VAT exemption.

What should you do about this if you think you may be affected? Give some consideration as to what aspects of the fund’s administration have been out-sourced and give some thought to whether these services may now qualify for VAT exemption.

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