VATA 1994 s.45 – Partnerships

(1)The registration under this Act of persons—

(a)^F422carrying on a business in partnership, ...

^F422(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F423may be in the name of the firm; and no account shall be taken, in determining for any purpose of this Act whether goods or services are supplied to or by such persons ..., of any change in the partnership.

(2)^M13^,^F424Without prejudice to section 36 of the Partnership Act 1890 (rights of persons dealing with firm against apparent members of firm), until the date on which a change in the partnership is notified to the Commissioners a person who has ceased to be a member of a partnership shall be regarded as continuing to be a partner for the purposes of this Act and, in particular, for the purpose of any liability for VAT on the supply of goods or services by the partnership ....

(3)Where a person ceases to be a member of a partnership during a prescribed accounting period (or is treated as so doing by virtue of subsection (2) above) any notice, whether of assessment or otherwise, which is served on the partnership and relates to, or to any matter arising in, that period or any earlier period during the whole or part of which he was a member of the partnership shall be treated as served also on him.

(4)^M14Without prejudice to section 16 of the Partnership Act 1890 (notice to acting partner to be notice to the firm) any notice, whether of assessment or otherwise, which is addressed to a partnership by the name in which it is registered by virtue of subsection (1) above and is served in accordance with this Act shall be treated for the purposes of this Act as served on the partnership and, accordingly, where subsection (3) above applies, as served also on the former partner.

(5)^M15^,^F425Subsections (1) and (3) above shall not affect the extent to which, under section 9 of the Partnership Act 1890, a partner is liable for VAT owed by the firm; but where a person is a partner in a firm during part only of a prescribed accounting period, his liability for VAT on the supply by the firm of goods or services during that accounting period ... shall be such proportion of the firm’s liability as may be just.

Definitions used in section 45 7

business: (1) In this Act “business” includes any trade, profession or vocation.
Defined in s.94(1) · see it in the full Act
supplied: (3) In sub-paragraph (2), “supplied” is to be construed in accordance with Part 1 of the Electricity Act 1989 (see section 64(1) of that Act ).
Defined in Sch.7A para.A1 · see it in the full Act; (3) In sub-paragraph (2), “supplied” is to be construed in accordance with Part 1 of the Electricity Act 1989 (see section 64(1) of that Act ).
Defined in Sch.8 para.3 · see it in the full Act
the Commissioners: “the Commissioners” means the Commissioners of Customs and Excise;
Defined in s.96(1) · see it in the full Act
VAT: “VAT” means value added tax charged in accordance with this Act;
Defined in s.96(1) · see it in the full Act
prescribed accounting periods: account for and pay VAT by reference to such periods (in this Act referred to as “prescribed accounting periods”) at such time and in such manner as may be determined by or under regulations and regulations may make different provision for different circumstances.
Defined in s.25(1) · see it in the full Act
prescribed accounting period: “prescribed accounting period” has the meaning given by section 25(1);
Defined in s.96(1) · see it in the full Act
subsection (1) above: (a) the reference in subsection (2) to “subsection (1) above” were to “subsection (1) and paragraph 24(1) of Schedule 9ZA”;
Defined in Sch.9ZA para.24(2) · see it in the full Act; (b) the reference in subsection (2A) to “subsection (1) above” were to “subsection (1) or paragraph 24(1) of Schedule 9ZA”.
Defined in Sch.9ZA para.24(2) · see it in the full Act

Cases considering section 45 3

HM Revenue & Customs v Pal & Ors

[2006] EWHC 2016 (Ch) · 31 July 2006Limits

Interprets firm-name registration as a collective registration of the actual partners. Inclusion on the VAT registration form does not make a non-partner part of the taxable person, while the provision can cover persons who will carry on the partnership business after registration. (see paras [17]; [22]-[24]; [38]-[39]) Confirms that a partner who has ceased to be a member remains treated as a partner for VAT purposes until notice of the change is given to the Commissioners. The absence of such notice supported liability during the relevant period. (see paras [18]; [28]; [36]) Cited in the statutory scheme governing the extent of a partner’s liability for VAT where the partner was in the firm for only part of an accounting period. The judgment did not need to determine the proportional calculation. (see para [9])

Daniels & Ors v Deville & Ors

[2008] EWHC 1810 (Ch) · 25 July 2008

The court noted that the backdated agreement purported to require registration under section 45, but treated that provision as part of a newly invented arrangement rather than as evidence of the parties’ original agreement. (see paras [65]-[66])

Fengate Developments (A Partnership) v Customs and Excise

[2004] EWHC 152 (Ch) · 6 February 2004

Applies the provision in recognising Fengate’s VAT registration as a partnership. That status supported the conclusion that Fengate could make the relevant taxable supply (see para [8]).

What each judgment says about section 45 is in the case-law panel in the full Act.

Amendments and notes

7 notes from legislation.gov.uk

Amendments

F422S. 45(1)(b) and word omitted (31.12.2020) by virtue of Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 48(2)(a) (with Sch. 8 para. 99) (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7) this amendment is subject to savings and/or transitional provisions, see the commentary.
F423Words in s. 45(1) omitted (31.12.2020) by virtue of Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 48(2)(b) (with Sch. 8 para. 99) (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7) this amendment is subject to savings and/or transitional provisions, see the commentary.
F424Words in s. 45(2) omitted (31.12.2020) by virtue of Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 48(3) (with Sch. 8 para. 99) (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7) this amendment is subject to savings and/or transitional provisions, see the commentary.
F425Words in s. 45(5) omitted (31.12.2020) by virtue of Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 48(4) (with Sch. 8 para. 99) (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7) this amendment is subject to savings and/or transitional provisions, see the commentary.

Marginal citations

M131890 c. 39.
M141890 c. 39.
M151890 c. 39.