VAT Recovery on Investment Management Fees
The Upper Tribunal has dismissed HMRC’s appeal in the case of The Chancellor, Masters and Scholars of the University of Cambridge.
This was the case that looked at the treatment of fees charged by fund managers for managing the investment portfolio of the University. The First-tier Tribunal had held that these fees were overhead costs of the University and therefore the VAT was partly recoverable in accordance with the Business/Non-Business and partial exemption methods. HMRC appealed against this, but have now lost.
Unless HMRC are able to get permission to appeal to the Court of Appeal, the decision confirms the ability of non-profit making organisations to recover a proportion of the VAT incurred on such costs.
For further advice or assistance please contact our VAT team.
Tel: +44 20 7969 5611