VIT45510 - Specific issues: when trustees of funded occupational pension schemes can claim input tax

A trust based pension scheme is represented by its trustee(s). A scheme, through its trustees, may make taxable supplies by, for example, opting to tax supplies of property, or making supplies of the type described in VIT44650. The trustee(s) of a scheme making taxable supplies may be VAT registered.

If it is VAT registered a trustee can treat as input tax VAT incurred on goods and services used, or to be used, for the purposes of its business. Where a trustee makes exempt supplies their recovery of input tax is only possible to the extent that they make taxable supplies.

However, if the trustees are themselves VAT registered they may treat the tax incurred on services connected with the continuing management of the scheme as their input tax. Any claim is subject to the normal rules. This is likely to mean that not all the tax on the management services can be recovered because the trustees will normally make exempt supplies or be engaged in non-business activities.