Specific issues: Supply of services by holding company or Service Company to an employer or employers
In some circumstances a holding company will provide services to its subsidiaries. Alternatively service companies may be set up to provide services to associated businesses. These services may incorporate various functions within them. Such functions may include the management of a pension scheme on behalf of the subsidiaries or associated companies who are acting as employers. Such an arrangement may also involve the use of tripartite contracts as per VIT45400 including both the holding/service company and also the pension trustees as contracting parties. In such circumstances, any input tax incurred by the holding or service company on the costs of managing the pension scheme that are used by it in order to make taxable supplies to the employer companies will be deductible.