HMRC End VAT On Pensions Call: NAPF

National Association of Pension Funds

The National Association of Pension Funds NAPF is seeking support from a legal challenge to HM Revenue and Customs on the levying of VAT on investment services to pension funds.  This follows the European Court of Justice’s ruling in the JP Morgan Claverhouse case in June 2007 that investment trust companies should be exempt from VAT.  The National Association of Pension Funds NAPF believes that pension funds have a strong case to be considered “special investment funds” and therefore exempt.  

If a number of pension funds were to share the financial costs of a legal challenge, Joanne Segars, chief executive of the National Association of Pension Funds NAPF says “they could get their money back several times over”.  There are a number of pension funds who have expressed interest in taking action, but are waiting on the Claverhouse decision to be made.  

Our view

Given the hammering Gordon Brown gave pensions funds when he removed the ability to reclaim Tax Credits on dividends, costing pension savers £5bn, we see the above call by National Association of Pension Funds NAPF to be a logical one.

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