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HMRC internal manual

VAT Registration

From
HM Revenue & Customs
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Entity to be registered: partnerships: registration of limited partnerships

As a limited partner is unable to take part in the management and running of the partnership business, it has been ruled by Tribunal that he can not be said to be making taxable supplies in the course and furtherance of that business. As a result, the registration should be raised in the names of the general partner(s) only. That is to say, when determining the person to be registered, the limited partners should be disregarded. The normal procedures for the registration of partnerships should be followed except in the following circumstances:

  • Where there is only one general partner, the registration should be raised in the name of that sole general partner either as a sole proprietor or incorporated company, whatever the case may be.
  • Where a sole general partner is already registered for VAT as a sole proprietor or incorporated company, the business activities of the limited partnership should be accounted for under the existing registration of the sole proprietor or incorporated company.
  • Where the general partner is an incorporated company and is a member of a VAT group, the business activities of the limited partnership will be part of that group and should be accounted for under the existing group registration.
  • Where two or more persons are registered for VAT as a partnership and those same persons are all general partners in a limited partnership, the business activities of the limited partnership should be accounted for under the existing registration of the partnership.

If you have evidence to suggest that a limited partner is getting involved in the management and day-to-day running of the firm, you should amend the registration to show him as a general or full partner (obtaining a signed VAT 2 or equivalent notification).

The policy of not including limited partners on the VAT registration of a limited partnership is based on the decision given in the Tribunal case of H Saunders & T G Sorrell, VTD 913.

See VATREG09420 for information about how a Scottish limited partnership should be registered.