New guidance has been added to the VAT Insurance Manual regarding the VAT treatment of “consultancy charges” for pensions consultants. HMRC’s position is that the charges rendered by pensions consultants in relation to group personal pension schemes do not fall within the VAT finance or insurance exemptions in Groups 2 and 5 of Schedule 9 to the VAT Act 1994, because the pensions consultant is not acting as an intermediary with a view to the conclusion of an individual pensions contract.
Pensions consultants are to account for VAT on their consultancy charges. In most cases employers will be able to recover any VAT charged as input tax, depending on the nature of the services supplied and the business of the employer.
To read HMRC guidance click here.