Abbey takes first round in customs battle

Abbey National has won the first round in a case against Customs & Excise over whether VAT should be charged on the outsourcing of fund management to third-party management groups. Under current Inland Revenue rules, while investment management carried out in-house by a fund manager is tax exempt, if an investment management group employs a third-party to carry out the fund management, it creates a VAT liability. A VAT tribunal found that Abbey National did not have to pay VAT on payments to subcontractors Inscape for the management of the Inscape Investment Fund, Abbey National's flags...