Investment trusts have a narrow window of opportunity to reclaim potentially hundreds of millions of pounds worth of VAT, law firm Berwin Leighton Paisner claims.
The trusts have until 27 June this year to file a claim for against HMRC for a portion of the VAT paid by them to fund managers on fund management fees for certain historical periods. In particular, the periods between December 1990 and 1996 and following 4 December 1996 are in question.
The claims follow on from case law involving JP Morgan, with HMRC subsequently conceding that it was liable to repay the VAT to fund managers, enabling them to reimburse the trusts. However, the vast majority of the trusts were not reimbursed fully and it now transpires they can claim the balance of the VAT, plus interest, from HMRC.
Berwin Leighton Paisner corporate tax partner Liesl Fichardt said:
“There is an unprecedented opportunity here for investment trusts and to make claims direct against HMRC. These companies need to get their protective claims in now in order to be eligible to claim once the law is settled. If they fail to take a few simple and cost effective steps now, the opportunity may be lost forever.”