News: VAT changes add oe25m to schemes' tax bill.

Pensions Week, August, 2005

The government has lumbered pension schemes with an additional GBP25m in tax for investment manage-ment fees, according to a pensions consultant.

Aon Consulting said the changes to value added tax (VAT) regulations brought in by HM Revenue & Customs (HMRC) could cost pension schemes heavily.

Current regulations allow for companies to claim back 30% of the VAT charged on the administration portion of the investment manage-ment charges made by their pension scheme investment managers.

However the government has indicated that the 30% is too generous an amount to allow for administration charges.

Marek Siwicki, senior investment consultant at Aon Consulting, argued: "This just seems like another way of raising taxes from UK companies...

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