The following Pensions guidance note Produced in partnership with Christopher Stiles of Gowling WLG provides comprehensive and up to date legal information covering:
THIS PRACTICE NOTE APPLIES TO TRUST-BASED DEFINED BENEFIT (DB) AND DEFINED CONTRIBUTION (DC) OCCUPATIONAL PENSION SCHEMES
VAT is a tax on customer expenditure. A business that is registered for VAT is liable to pay across VAT to HMRC on the value of supplies of goods and services made by it, and so adds VAT onto the price it charges customers for those supplies. Such a business can claim credit for VAT it pays on goods and services used by it. The VAT that the business adds onto its prices is known as 'output tax' and the VAT it can reclaim on its purchases is known as 'input tax'.
VAT only applies to 'taxable supplies'. Not all supplies are taxable—for example, insurance and the provision of finance are exempt from VAT. Some types of narrowly-defined supply are taxable at the zero rate or at a reduced rate (currently, 5%), but the standard rate of VAT is 20%.
There are numerous conditions for recovery of input tax, which are beyond the scope of this note. The most important principles are the following:
the person making the repayment claim must be the recipient of the supply—simply paying for a supply does not render the payer the recipient of that supply
input tax can only be reclaimed if it is incurred for the
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