Indirect, capital and transfer taxes and other tax obligations: VAT and partnerships: Does a partnership exist?
Please refer to the guidance at PM10200. In most cases, it will be obvious that a partnership exists but it can be more difficult to determine when two or more parties come together for the purpose of a specific business venture. The issue is relevant for VAT purposes in deciding whether the venture itself has made a supply or whether the venturers are supplying each other prior to one of them supplying the final product.
If a partnership exists, the consequences are relatively straightforward. Supplies are made to and from the partnership, including supplies to and from partners where they trade independently and are not acting in their partnership capacity. But supplies are not made within the partnership - thus the financing of a partnership by the partners and the distribution of partnership profits are not the consideration for any supply.
The guidance at VTAXPER52000 provides further details.