Outsourcing VAT reclaims

VAT litigation at the ECJ in the case of JP Morgan Claverhouse Investment Trust plc resulted in a change of the liability of investment management services when provided to investment trusts from a taxable to a VAT exempt supply.

Our client – an investment manager – was impacted by the change in rules, having provided management services to investment trusts.

Previously, this business had charged VAT on its services in accordance with standard practice, and these investment trust clients had suffered VAT as a cost. Our client was eligible to claim repayment of the VAT on behalf of its investment trust customers.

However, the change of law meant that our client’s own VAT recovery was adversely impacted, requiring the re-submission of its own VAT returns.

Liaising with both our client and theirs, our accounts team and VAT specialists were able to extrapolate the appropriate data and agree a methodology with HMRC to minimise the cost to our investment manager client and maximise the VAT repayment received on behalf of the investment trusts. 

Throgmorton: “This was a classic case of how our integrated approach works. By combining the technical skills of our VAT specialists with the client specific knowledge gained by our accounts team interacting daily with our client, we were able to translate business information quickly into financial return.” 

For VAT advice contact Dan Kerry.

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