- HMRC allows employers of defined benefit pension schemes to recover up to 100% of VAT on investment costs.
- Employers and pension scheme trustees may need structural changes to maximize VAT recovery.
- Few employers currently have the necessary structures in place for full VAT recovery.
- Eligible employers can reclaim VAT from the past 4 years and recover more in the future.
- Recommended structures include VAT grouping, contractual arrangements, and paymaster arrangements.
- Contractual or paymaster arrangements are often preferable to VAT grouping.
- HMRC will provide further clarifications by Autumn 2025.
- Employers should assess potential VAT savings and consider structural changes.
- Those with existing structures should identify unrecovered VAT and prepare for reclaims.
- Next VAT filing deadline for calendar quarter taxpayers is 30 September 2025.
Source: jdsupra.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.
