VATREVCON33900 - How the construction reverse charge works: End users and intermediary suppliers: Joint ventures
Source: gov.uk (2025-04-02)


The intermediary supplier exclusion can apply to supplies of building and construction services made to an entity which is not the end user of those services but is ‘connected’ with the end user or who, when taken together with the end user, has a relevant interest in land (see VATREVCON33300 (https://www.gov.uk/hmrc-internal-manuals/vat-reverse-charge-for-building-and-construction-services-manual/vatrevcon33300)). ‘Connected means that one party must be a ‘group undertaking’ of the other party, as defined in section 1161 of the Companies Act 2006 (https://www.legislation.gov.uk/ukpga/2006/46/section/1161/2007-01-20).

There are different types of joint ventures and it is necessary to determine the type in order to determine whether that joint venture is an undertaking pursuant to section 1161 of the Companies Act 2006 (https://www.legislation.gov.uk/ukpga/2006/46/section/1161/2007-01-20), and whether that joint venture can be a connected party. Examples of types of joint venture are listed below.

Unincorporated Joint Ventures or Joint Arrangement Non-entities (JANE)

The parties to the unincorporated joint venture, known as Joint Arrangement Non-entities, make different contributions through their existing structures to create a business venture or achieve a common objective. There is typically an agreement detailing the rights and obligations to each other and third parties. Profits and losses flow directly to the parties of the joint venture arrangement.

Unincorporated joint ventures or Joint Arrangement Non-entities do not meet the conditions of an ‘undertaking’ or ‘group undertaking’ in section 1161 of the Companies Act 2006 (https://www.legislation.gov.uk/ukpga/2006/46/section/1161/2007-01-20) so cannot be a connected party to an end user for the purpose of the reverse charge, unless the joint venture gives rise to a general partnership in accordance with the Partnership Act 1890.

An unincorporated joint venture or Joint Arrangement Non-entities may be an end user. For example, co-owners of land who are treated as a single person for VAT purposes.

Companies or corporations

A company or corporation is normally a private limited liability company or a company limited by guarantee.

A company or corporation can be an end user or connected with an end user for the purposes of the intermediary supplier exception provided that the conditions of section 1161 of the Companies Act 2006 (https://www.legislation.gov.uk/ukpga/2006/46/section/1161/2007-01-20) are met.

Limited Liability Partnership (LLP) incorporated under the Limited Liability Partnerships Act 2000

A Limited Liability Partnership is a body corporate with legal personality separate from that of its members. A Limited Liability Partnership can be an end user or connected with an end user for the purposes of the intermediary supplier exception provided that the conditions of section 1161 of the Companies Act 2006 (https://www.legislation.gov.uk/ukpga/2006/46/section/1161/2007-01-20) are met.

A Limited Partnership (LP) formed under the Limited Partnership Act 1907

A limited partnership consists of:
- general partners, who are liable for all debts and obligations of the firm
- limited partners, who contribute a sum or sums of money as capital or property valued at a stated amount.
A limited partnership must have at least one ‘general partner’ and one ‘limited partner’.

Limited partners are not able to take part in the management and running of the partnership business. Only general partners make supplies for VAT purposes. A general partner can be an individual or a body corporate.

A general partner that is a body corporate can be an end user or connected with an end user for the purposes of the intermediary supplier exception provided that the conditions of section 1161 of the Companies Act 2006 (https://www.legislation.gov.uk/ukpga/2006/46/section/1161/2007-01-20) are met.

Where there are two or more general partners, those general partners are treated like a general partnership for VAT purposes and can be an end user or connected with an end user for the purposes of the intermediary supplier exception provided that the conditions of section 1161 of the Companies Act 2006 (https://www.legislation.gov.uk/ukpga/2006/46/section/1161/2007-01-20) are met.

A general partnership under the Partnership Act 1890

A partnership consists of two or more persons and is defined as ‘the relation which subsists between persons carrying on a business in common with a view to profit’.

A general partnership can be an end user or connected for the purposes of the intermediary supplier exception provided that the conditions of section 1161 of the Companies Act 2006 (https://www.legislation.gov.uk/ukpga/2006/46/section/1161/2007-01-20) are met.