HMRC has responded to the Court of Justice of the European Union (CJEU) judgment in PPG Holdings BV (C-26/12) by issuing Brief 06/14. HMRC's policy hitherto has been to allow a business which directly incurs administrative costs of an employee pension scheme to reclaim VAT on this as an overhead cost even when they are recouped from the pension fund (upon which VAT did not need to be charged by the company). But no VAT could be reclaimed by the company on investment advisory services. The decision in PPG was that the investment costs were also business overheads, so HMRC was obliged to reconsider its position.
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