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PBR: VAT cut could reduce Sipp fees

Chancellor Alistair Darling’s reduction in VAT from 17.5 per cent to 15 per cent will reduce some fees on Sipps, according to Standard Life.

The insurer says the VAT cut, which Darling announced in today’s pre-Budget report, will reduce some of the fees paid to external property managers and surveyors – for example, VAT on the property manager’s annual charge will fall by £12.87 a year to £77.25.

But Sipp charges are already VAT free for insurance companies – it is only when external specialists are involved that the tax becomes payable on their services.

Standard Life head of pensions policy John Lawson says: “The reduction in VAT will provide a small reduction in fees for some Sipp investors who invest in commercial property. Non-insurance Sipp providers also charge VAT on their administration fees. Whilst this means that VAT on charges levied by Sipp providers not classed as insurers will fall by 2.5 per cent, their customers are still paying 15 per cent more tax on their fees than the customers of [insurance companies].”


‘Ministers could be jailed over pensions’

Conservative Shadow Treasury Chief Secretary Philip Hammond claims if Government ministers were subject to FSA regulation they would be jailed for some of the promises they have made on pension personal accounts.


Guide: day-to-day tasks ​— can your system manage?

This guide from Johnson Fleming will take you through the required communication and also give ideas for additional actions that will ensure your auto-enrolment project is a success. As well as highlighting what is required from a system to ensure it is up to the tasks, an overview of the following is also provided: data validation; data categorisation; employee communication; opt-in process; opt-out process; produce contribution schedule; contribution reconciliation process; upload of member data to pension provider; upload contribution to pension provider; manage salary sacrifice process; enrolment process; re-enrolment process; and management of increased employee queries.


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