DMBM540360 - Debt and return pursuit: Insurance Premium Tax: Who is liable to pay the debt? Members of unincorporated associations

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An incorporated association is an association of persons not in partnership and not registered under any Act of Parliament (e.g. the Friendly Societies Act 1992).

Regulation 10 (1) of the Insurance Premium Tax Regulations 1994, provides:

Where anything is required to be done by or under the Act (whether by these Regulations or otherwise) by or on behalf of an unincorporated body other than a partnership it shall be the joint and several responsibility of

(a) every member holding office as president, chairman, treasurer, secretary or anysimilar office; or
(b) if there is no such office every member holding office as a member of a committee by which the affairs of the body are managed; or
(c) if there is no such office or committee, every member but subject to paragraph (2) below, if it is done by any of the persons mentioned above that shall be sufficient compliance with any such requirement.

The reference to paragraph (2) is to the requirement to register, which must be the duty of a person authorised in that behalf.

The liability under Regulation 10 (1) includes a responsibility to pay and account for tax properly. However, as a matter of policy do not attempt the bankruptcy of any member for the non-payment of association debts. The association is not a legal entity separate fromits members but it may be wound up as an unregistered company under Part V of theInsolvency Act 1986 if its constitution and rules provide for it to be so wound up.

Please view in conjunction with the CR guidance (S8-25) if clarification is required.