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HMRC internal manual

Debt Management and Banking Manual

Debt and return pursuit: Insurance Premium Tax: Who is liable to pay the debt? Members of unincorporated associations

An incorporated association is an association of persons not in partnership and notregistered under any Act of Parliament (e.g. the Friendly Societies Act 1992).

Regulation 10 (1) of the Insurance Premium Tax Regulations 1994, provides:

“Where anything is required to be done by or under the Act (whether by theseRegulations or otherwise) by or on behalf of an unincorporated body other than apartnership

it shall be the joint and several responsibility of-

(a) every member holding office as president, chairman, treasurer, secretary or anysimilar office; or

(b) if there is no such office every member holding office as a member of a committee bywhich the affairs of the body are managed; or

(c) if there is no such office or committee, every member;

but subject to paragraph (2) below, if it is done by any of the persons mentioned abovethat shall be sufficient compliance with any such requirement.”

The reference to paragraph (2) is to the requirement to register, which must be the dutyof a person authorised in that behalf.

The liability under Regulation 10 (1) includes a responsibility to pay and account for taxproperly. However, as a matter of policy do not attempt the bankruptcy of any member forthe non-payment of association debts. The association is not a legal entity separate fromits members but it may be wound up as an unregistered company under Part V of theInsolvency Act 1986 if its constitution and rules provide for it to be so wound up.

Please view in conjunction with the CR guidance (S8-25) if clarification is required.