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It’s a while since we last commented on VAT on pensions but we return with some good news which HMRC have quietly slipped out in updated content to the VAT Manual. Back in 2014, following the PPG case, HMRC proposed withdrawing their practice of allowing employers to recover VAT on charges on administration costs for DB pensions. The debate over various alternative VAT arrangements has rumbled on since then, with HMRC repeatedly extending the…
The Conservative manifesto, ‘Forward, Together’, unveiled late last week by Theresa May, was notable rather less for reiterating commitments to traditional, small government, Conservative principles of ‘low tax’ and ‘better regulation’ and rather more for its embrace of social inclusion, identifying a “need [for] a partnership between the individual and the wider nation, between private sector and public service, and the strong leadership only government can provide”. Unsurprisingly, perhaps, most of the attention…
The UK government has announced the abolition of the tax benefits of employee shareholder status in today’s Autumn Statement. The change applies to shares issued on or after 1 December 2016. Since there has to be a minimum 7 clear days notice between the individual employee being advised on the implications of employee shareholder status and the issue of the shares, this effectively means that unless employees have already received that advice, no further issues…
Keen readers will recall the long-running saga of the correct treatment of VAT incurred by employers on pension fund costs. Following rulings by the ECJ, HMRC had determined that it needed to change existing UK practice. In particular, this affected defined benefit schemes where HMRC had allowed employers to recover some, but not all, of the VAT paid on investment managers’ fees. This ran counter to the ECJ’s decision in the PPG case. In October…
You may remember that HMRC said they would issue further guidance on the VAT treatment of DB pension fund administration costs over the summer. Well, by my reckoning we are well and truly into autumn but HMRC have today published a new Brief. Has it resolved matters? In short (and, sadly) No. First, we have official confirmation that the tripartite agreement route may not in fact be very tax efficient. HMRC had previously confirmed that…
The UK’s National Association of Pension Funds (NAPF) has rebranded itself as the Pensions and Lifetime Savings Association (PLSA). Why the change? The PLSA says it better reflects changes to the way retirement provision is made, with people working longer and funding retirement in new ways, as well as having new rights to access their pensions savings. It also marks a move away from a focus purely on institutional pension saving towards the…
On 7 July we reported that HMRC’s online filing system for employment related shares was down – worrying, given the 6 July filing deadline. Things finally seem to be returning to normal but some issues are still being reported as it appears HMRC are limiting the number of concurrent users of the system so that error messages may still be generated. HMRC have extended the filing deadline until 4 August and have put out the…
As widely trailed, the UK government has confirmed in the Summer Budget on 8 July that pensions tax relief for those earning more than £150,000 will be severely restricted from April 2016 – relief will be tapered to a minimum of £10,000 a year. In addition, the government announced that it is launching a consultation on the wider taxation of pensions. The current system can broadly be described as ‘exempt, exempt, taxed’ with the contributions…
From 1 April 2015, the FCA will be able to investigate breaches of the Competition Act, conduct market studies under the Enterprise Act 2002 and make market investigation references to the Competition and Markets Authority (CMA). Recently, the FCA published a consultation paper “Competition Concurrency Guidance and Handbook amendments” setting out how it proposes to use its powers as a concurrent regulator. For the most part, the consultation does not raise any concerns – with…
HMRC has now issued further guidance on the implications of the CJEU rulings in ATP and PPG, two cases that dealt with the VAT treatment of costs incurred by pension funds. Clarification of HMRC’s approach has been eagerly awaited, following consultation with a range of industry bodies. So where do things stand now? Defined contribution schemes Business Brief 44 (2014) confirms that administration (including fund management) services provided to DC pension schemes are generally exempt…