- HMRC published new guidance on VAT deduction for pension fund management costs on 18 June 2025.
- Employers can now deduct VAT on all pension scheme costs, including asset management.
- This change is expected to reduce the VAT burden on businesses.
- Businesses should review their pension fund structures for compliance and opportunities.
- Previously, VAT on investment management was not deductible by employers.
- New policy allows employers to recover input tax if costs are used by both employer and fund.
- Asset management costs are now fully deductible by employers under normal rules.
- Employers must prove they are the recipient of supplies for VAT deduction.
- Trustees can deduct input tax if they supply management services to employers.
- The policy is seen as a positive development for businesses.
Source: insightplus.bakermckenzie.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.
