A Partnership v Revenue & Customs

VAT � partnership dispute � continuing partners separately instruct solicitors in dispute with outgoing partner � whether VAT on legal bills recoverable by partnership� � held� - no as supply not �to� the partnership

Mr B and Mr C were present in the hearing.� They were the two continuing partners and comprised the appellant partnership.� Both had been partners at the time of the dispute.� Both had provided witness statements.

I admitted the witness statement into evidence on the basis that Mr A�s health amounted to a good explanation as to why he had not come to the hearing and in any event it did not appear that much, if any, factual evidence in the statement was in dispute.� I informed Mr Priest that he was free to make submissions on how much weight I should attach to the statement. (In the event, Mr Priest chose to make no submissions on it).

I largely accepted the evidence of all the partners, which was consistent and credible.� Although Mr Priest asked a few questions, largely the evidence was unchallenged.� I set out below my findings of fact and, where the facts were in dispute, the reasons for the findings I make.

There was little dispute over the facts.� The partnership had been founded long before any of the current partners had joined it.� At the time of the matter in dispute, the partnership comprised four partners, Messrs. A, B, C and D, all of whom had been partners for many years.� The partnership deed, to which they were all parties, provided that a partner had to retire at a certain age and on retirement he would receive an amount equal to his share of the partnership capital .� The retiring partner was not entitled to any payment in respect of the partnership�s goodwill .