Three are one

Liability to register for VAT

The taxpayer traded as a decorator project manager and carpenter. He maintained that the project management activity was carried out as a partnership with his wife.

HMRC said the taxpayer carried out all three activities. Further they should be aggregated as a result of which he should have registered for VAT on 1 June 2008; without the project management turnover there would have been no liability to register. HMRC backdated the registration and issued a late registration penalty for £10 750 before reducing it to £3 247.

The taxpayer appealed.

HMRC claimed that a partnership had never existed because the taxpayer had not claimed the project management was a partnership until after the Revenue had identified a late registration problem. He had declared it on his individual self-assessment tax returns as sole trader turnover.

The taxpayer said his wife was...