VAT on investment management services - update
My colleague Roger Bell reported in July this year on an important European Court of Justice (ECJ) case involving the VAT treatment of fund management services.
The Times and the Association of Investment Companies today report that HMRC has withdrawn its appeal in the case of JP Morgan Claverhouse Investment Trust plc/Association of Investment Trust Companies v HMRC.
The ECJ ruled in favour of the appellants in June but the matter was to be referred back to the VAT tribunal for determination. However, HMRC has decided to accept the ECJ decision and is expected to shortly make an announcement confirming its position.
As we reported previously, other types of funds (e.g. pension funds) have submitted VAT refund claims pending the final outcome of this decision. HMRC’s last Business Brief 58/07 stated that HMRC did not believe the decision could extend to the management of other types of funds. This remains to be seen but there is likely to be further litigation involved, so watch this space…
