Are pension schemes VAT exempt?

Asked by: Obie Effertz  |  Last update: February 9, 2022
Score: 4.2/5 (23 votes)

The management of defined contribution occupational pension schemes may be exempt from VAT. ... Consequently, Revenue accepts that a defined contribution scheme (within the meaning of the Pensions Act 1990) is regarded as a specified fund.

Are pensions VAT exempt?

The payment of pensions and receipt of contributions are exempt transactions. The rules of VAT have always been difficult to apply in respect of employer-sponsored schemes which divide the responsibilities for running the scheme between employer and trustees.

Can pension schemes be VAT registered?

It is possible, however, to register the pension scheme for VAT in order to reclaim the expenditure.

Are pension costs Vatable?

HMRC allowed employers to deduct VAT incurred in relation to the administration of an occupational pension scheme but considered that investment management costs related solely to the activities of the pension scheme. ... Businesses can reclaim VAT in relation to the administration of the fund.

What is an unfunded pension scheme?

In unfunded schemes, no contributions are made to the scheme in advance and no investment fund is built up. Instead the benefits are paid out by the employer when they fall due, alongside the salaries of current employees. This type of arrangement is called 'Pay As You Go'.

VAT - issues for UK pension schemes

31 related questions found

Are journals Vatable?

The Value Added Tax Act 1994, section 30 provides for the zero rating of goods listed in Schedule 8 to the Act. Schedule 8, Group 3 sets out books, which may be zero-rated as follows: ... Books, booklets, brochures, pamphlets and leaflets. Newspapers, journals and periodicals.

What printed items are VAT exempt?

The items officially listed as zero-rated VAT print products are as follows; Books, booklets, brochures, pamphlets and leaflets. Newspapers, journals and periodicals. Children's picture books and painting books.

Is there VAT on pens and pencils?

If someone sends you a gift, and it is clearly marked as a gift, and there are no markings or suggestions whatsoever that it's from a commercial enterprise, you don't need to pay anything. If the value is above £15/£35 but below £135, you have to pay 20% VAT plus a handling charge.

Is there VAT on plain A4 paper?

For leaflets and flyers, VAT will be applied if any of the following are true: The paper size is larger than A4. The quantity is less than 50.

Does coffee have VAT?

As long as it's consumed away from your premises, iced coffee, iced tea, and milkshakes are zero rated. But if it's eaten in then you have to charge VAT, because it counts as a sale in the course of catering.

What's the difference between zero rated and exempt VAT?

Zero-rated items are goods on which the Government charge VAT but the rate is currently set to zero. ... Exempt items are goods on which no VAT is paid or charged, but which still need to be recorded on the VAT Return.

What is zero rated VAT?

Zero-rated means that the goods are still VAT -taxable but the rate of VAT you must charge your customers is 0%. You still have to record them in your VAT accounts and report them on your VAT Return.

Do booklets have VAT?

All books and booklets are exempt from VAT charges unless they are designed and printed to be written in, like diaries, calendars and record books.

Is printing exempt or zero rated?

HMRC Guidelines on VAT

Promotional or information items of print are zero-rated, meaning they are completely free of VAT. These include, brochures, leaflets, pamphlets and books.

Does postage include VAT?

Postal services provided by the Royal Mail Group Limited under its remit as the universal postal service provider in the UK are exempt from VAT if they're subject to price and regulatory control.

Are flyers VAT exempt?

Most Flyers & Leaflets are usually zero rated for VAT, which means you don't need to add VAT to the prices listed. ... VAT is chargeable if the Flyer or Leaflet is used to obtain a discount for goods and services i.e. 75% Off Clothes with this Flyer. VAT is chargeable if the Flyer or Leaflet is used for admission purposes.

What is the difference between a funded pension plan and an unfunded pension plan?

What Is Unfunded Pension Plan? ... This is in contrast to an advance funded pension plan where an employer sets aside funds systematically and in advance to cover any pension plan expenses such as payments to retirees and their beneficiaries.

Which public sector pension schemes are funded?

Some public sector pension schemes (for example the Local Government Pension Scheme) are funded, but many public sector pensions (including the NHS, teacher and civil service pension schemes) are unfunded defined benefit pensions.