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HMRC internal manual

Debt Management and Banking Manual

HM Revenue & Customs
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RLS: action in Tracing Group: customer traced - customer in prison

Although the provisions in the Prison Rules 1964 prevent a person in prison from carrying on a business from prison, they do not prevent agents from carrying on a business on behalf of a prisoner.

If a prisoner owns a business, at some address other than prison, which makes taxable supplies above the registration threshold, it is the prisoner who is liable to register as he is still the one who makes the taxable supply.

If a prisoner is prevented from running the business whilst in prison and is either liable to be registered, or was registered prior to being committed to prison, another person should be authorised to deal with the VAT affairs of the business by power of attorney.

Being committed to prison is not treated as incapacity under the VAT Regulations 1995, Regulation 9.