The Pensions Research Accountants Group has responded to recent HM Revenue & Customs changes to the VAT treatment of pension fund costs, advising schemes to seek guidance on their individual circumstances.
Two recent developments are impacting the potential recovery of VAT on pension fund costs by either the employer or the pension scheme.
Insurer exemptions will be changed from April 1 next year, although defined contribution schemes will not be affected. The other development relates to the conditions under which employers can recover VAT on pension fund services.
Andy Chambers, chair of the PRAG VAT working party, said: "There is no single solution which will suit all employers and schemes, so PRAG advises all parties to seek specific guidance to cover each scheme’s specific circumstances.”
