Jurisdiction(s):
United Kingdom

Key definition

Pension scheme definition

What does Pension scheme mean? In legal practice, a pension scheme is an arrangement set up under a trust deed, contract or other instrument to provide retirement income and related benefits to members or their dependants. It pays or secures benefits on retirement, death, on reaching a specified age, on serious ill-health or incapacity, or in similar circumstances. In the UK, “pension scheme” is a statutory term (for example in the Finance Act 2004 and pensions legislation, with parallel Northern Ireland provisions). In Ireland, the Pensions Act 1990 and Revenue rules use comparable concepts. Usage is broadly consistent across England & Wales, Scotland, Northern Ireland...

UK VAT on Occupational Pension Schemes: Input Tax Recovery Options, DC SIF Exemption, Historic Insurance Treatment, and HMRC Policy Evolution (PPG to 18 June 2025)

Published by a LexisNexis Pensions expert

Practice notes

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THIS PRACTICE NOTE RELATES TO OCCUPATIONAL PENSION SCHEMES

This Practice Note cites decisions of the Court of Justice of the European Union (CJEU). For direction on whether EU judgments bind courts in the UK, see Practice Note: Assimilated law—Assimilated case law.

VAT basics

The United Kingdom’s Value Added Tax (VAT) regime, originating in European law, is principally set out in the Value Added Tax Act 1994. VAT is a levy on consumer spending. A VAT-registered business must account to HMRC for VAT on the value of supplies of goods and services it makes, and therefore adds VAT to the amount it charges its customers for those supplies. That business may obtain credit for VAT it incurs on goods and services it uses. The VAT added to its prices is termed ‘output tax’, while VAT recoverable on its purchases is termed ‘input tax’. VAT only applies to ‘taxable supplies’. Only ‘taxable supplies’ fall within the scope of VAT in the UK itself. Exempt areas include insurance and the provision of finance under VAT rules. Not every supply is taxable—eg insurance and the provision of finance are exempt from VAT. Certain narrowly defined supplies are taxable at the zero rate or at...

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Christopher Stiles

Gowling WLG

Christopher Stiles is a partner based primarily in Birmingham who helps clients to deal with any contentious or non-contentious legal issues that may arise in relation to their pension plans with the greatest possible ease and efficiency.Pensions can be a challenging area for employers, with pension plans that ranging from legacy arrangements that are now closed to accrual, but are still a major liability on the balance sheet, to ongoing plans that are used to reward current employees.Christopher takes a particular interest in innovative and complex projects including asset-backed funding arrangements, liability management exercises and buy-outs.On the trustee side, Christopher has close ongoing relationships with his trustee clients and helps them through the legal issues they face in running their pension schemes, both the day-to-day problems and larger projects including scheme mergers and wind-ups...

Web page updated on 22/05/2026

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