The First Tier Tribunal (FTT) recently held that the supply of services of an investment manager computer system by a U.S. group company to a UK VAT group, which used that computer system in managing both funds which were classed as "special investment funds" (SIFs) for UK VAT purposes and funds which were not, should be treated as standard rated taxable supplies. As background, the default position is that fund management services are not exempt supplies for UK VAT purposes, but the management of funds which are designated as SIFs is exempt. In this case the VAT exemption for management of SIFs was found not to be relevant. While the supply of the computer system amounted to a supply of management services (in accordance with the European Court of Justice decisions in Abbey National and GfBk), this was a single composite supply which attracted VAT at the standard rate given that the funds in question were predominantly non-SIFs. It was held that it was not possible to apportion the supply based on the use as between the two types of funds.