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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? Partners

It is rare for insurance underwriting business to be carried on by a partnership, but a person who is liable to pay IPT as a taxable intermediary or insured person may be a partnership.

The procedure is as for recovery of a VAT debt.

Where a partnership continues to trade but a partner ceases to be a member of the partnership, his liability for partnership debts continues until the date on which we receive notification of the change in the membership. Section 36 (1) of the Partnership Act 1890 provides:

“Where a person deals with a firm after a change in its constitution

he is entitled to treat all apparent members of the old firm as still being members of the firm until he has notice of the change.”

However, we must take into account properly notified changes in the partnership from the date when we become aware of them, and this may mean apportioning liability on a daily basis.