THE National Association of Pension Funds and the Wheels Common Investment Fund are set to bring a test case against HM Revenue and Customs to recover £300m of VAT.
The move follows a European Court of Justice ruling last year that investment trusts should be exempt from paying value added tax on the fees charged to them by third parties for the management of its assets.
The NAPF and the WCIF, an £8 billion multi-employer scheme covering the Ford Motor Company, Jaguar Cars and Land Rover, said a successful challenge would also mean pension funds would no longer have to pay an estimated £100m per annum in VAT going forward.
NAPF chief executive Joanne Segars urged schemes to talk to their investment managers about submitting claims – and said they should also appeal any claims that had already been rejected.
She said: "We hope that our actions will establish that investment funds should not be VATable and that schemes will get money back retrospectively."0
Segars added: "We believe that we have a very strong case and are currently waiting for a date when it will be heard by the UK VAT & Duties Tribunal."
Professional Pensions revealed that the NAPF was considering a test case last August (PP, August 30).
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