News

Case law - Wheels VAT case heard by ECJ

The Wheels VAT case was heard in the early part of September by the European Court of Justice. 

The case had been launched by the NAPF and Wheels Common Investment Fund, a multi-employer scheme, in 2008, after a ruling in the ECJ that investment trusts were special investment funds and should be exempt from paying VAT on investment management services.  Wheels and NAPF had argued that defined benefit schemes should be exempt from paying VAT on investment management services. Defined contribution schemes are already exempt.  A VAT tribunal referred the case to the ECJ.

At the ECJ hearing, the European Commission agreed with HMRC and argued against granting an exemption to defined benefit schemes.  Employers and trustees of defined benefit schemes had been hopeful that if the ECJ ruled in favour of the NAPF and Wheels, defined benefit schemes would no longer have to pay VAT on investment management services and might even be entitled to a rebate for VAT already paid.  However the European Commission's view may now sway the odds in favour of HMRC.  The ruling is expected within the next six months.