HMRC ordered to pay back investment trust taxes

News Article - 24 May 2012
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The investment industry could gain up to £300 million from HM Revenue & Customs (HMRC), claims Accountancy Age.

The Association of Investment Companies (AIC) and JP Morgan Claverhouse Investment Trust have won a legal case that investment trusts should be exempt from VAT on management expenses.

The announcement means the investment sector will save around £40 million a year and the AIC has already claimed it will urge HMRC to pay back all previous claims immediately.

"In future, this money together with refunds relating to earlier years, should be available for shareholders. The benefit will compound into the future and further enhance shareholder value," said Sir Michael Bunbury, JP Morgan Claverhouse Investment Trust chairman.

Following the verdict, the AIC is also calling on the government to extend the tax exemption over venture capital trusts.

This is the second court case recently ruling against HMRC. A previous judgement ruled that it does have a care of duty towards taxpayers. Taxpayers can now sue HMRC for damages.

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