Following the decision of the Court of Justice of the European Union in PPG Holdings BV7, HMRC issued Revenue and Customs Brief 43 (2014) which created a transitional period for employers to use a simplified mechanism whereby employers could obtain a 30% input tax deduction on the VAT element of single invoices concerning investment management and administration services relating to their pension funds.

However, owing to difficulties in reconciling the new rules with pensions and financial services regulations and case law in this area, HMRC has issued Revenue and Customs Brief 14 (2016), which extends the transitional period and use of the simplified mechanism to December 2017.

Revenue and Customs Brief 14 (2016) can be found here.