UK - Trustees of pension schemes whose company sponsors have ceased trading should now be able to claim VAT on incurred expenses following a court ruling.
The decision came after an appeal against Her Majesty's Commissioners of Revenue & Customs (HMRC) by independent trustee firm Capital Cranfield Trustees which was working for the Kenrick and Jefferson Group Pension Plan as it was winding up.
Katherine Dandy, partner, Sacker & Partners, who acted for Capital Cranfield Trustees Limited, commented: "We welcome this decision as it reflects a successful marriage of the law and common sense."
"The fact that HMRC would offset the VAT costs incurred while a company is in business but not when the scheme sponsor is no longer registered for VAT is unfair and inconsistent."
The effects of this decision could be wide ranging and run into millions, in Dandy's view.
Trustees should be able to claim up to three years of refunds on expenses if the company was VAT registered while trading, she said.
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