22. Funded pension schemes
When VAT is deductible on costs incurred in winding up a company’s occupational pension scheme.
Under the provisions of Section 94 of the VAT Act 1994, VAT is still deductible on supplies where a company:
- is being wound up
- still exists as a legal entity
- still receives supplies for which it’s liable for VAT
This includes VAT on costs incurred in winding up the company’s occupational pension scheme.
Where the deductible VAT on these supplies is more than the output tax the company owes HMRC for the relevant period, the company can reclaim the difference through the office of its insolvency practitioner.
Read Funded pension schemes (Notice 700/17) for more information.