In the Wheels case, a VAT tribunal referred to the European Court of Justice (ECJ) the question of whether fund managers for pension funds can recover VAT. An accountancy firm, Baker Tilly, has warned pension schemes to ensure that fund managers register protective claims with HMRC to recover potentially overcharged VAT ahead of the ECJ ruling in the Wheels case.

The ECJ will decide whether or not a pension fund is a special investment fund for the purpose of the European VAT Act, which would determine if any VAT exemption applies.

If the Wheels case succeeds, an estimated VAT saving of £100m per year is expected for the pensions industry. Due to the rolling four year window, fund managers may need to submit protective claims as soon as possible