VAT Position For Independent Trustees Clarified

The recent case of JIB Group Limited v The Commissioners for Her Majesty's Revenue & Customs [2012] UKFTT 547 (TC) has confirmed the position regarding input and output VAT for independent trustees. The case concerned Independent Trustee Services Limited ("ITSL"), a professional trustee company. ITSL instructed third party professional advisers to provide advice in relation to various pension schemes ("the Advisers"). The Advisers' fees were paid directly from the Schemes' funds. The question was whether ITSL was entitled to recover VAT charged by the Advisers instructed by ITSL in its capacity as an independent trustee of the pension schemes, and the wider issue was therefore whether VAT incurred on third party costs can be recovered by statutorily independent trustees. The Tribunal was also asked to give an opinion on whether, in principle, ITSL would have any liability to account for an amount of output tax.