- HMRC announced a change in VAT deduction policy for pension fund management.
- Employers can now deduct all VAT on administration and management of defined benefit pension funds.
- The previous dual use apportionment of investment costs is eliminated.
- This change may increase VAT recoverability and simplify VAT accounting.
- Trustees can also deduct input tax for providing management services to employers.
- The new policy is effective from 18 June 2025.
- Additional guidance will be published by Autumn 2025.
Source: taxscape.deloitte.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
