I have been wondering about this. What if you are half way through PhD and decided to quit? Would it look bad for the supervisor within the department? Or do they just say that the student wasn't capable enough etc..

Sometimes I thin that when supervisors get stuck with students that aren't that capable, hard working and motivated they would almost want to get rid of the student. Not sure if that's really the case though...

Frankly, no supervisor would like to stain their CV. Certainly, it will look bad on the whole team of supervisors. In fact, it will become another typical gossip within academician in that university or even up to the research communities in that field. Worst still, they have to work hard to ensure at least the next research student get his/her doctorate. Doing research involves teamwork. When we, researchers, passed our viva, it is not only our own hard work, effort… etc, but includes reasonable amount of effort from supervisors too. Having said that, come on, it is not worth it to quit. Getting PhD is not all about brain but it is heavily towards researcher's effort. If you happen to get stuck with brainy part, it is where the supervisor should guide you. Happy researching, cheers.

If a quitting student is funded by a research council then quitting part way through (as I did 13 years ago, so know about this stuff!) does have implications for a department. It means they are likely to lose out on future PhD funding.

And by implication that would knock on to the supervisor who is likely to be blamed by his colleagues/bosses.

Not good. Having said that there can be very good reasons for quitting. But it can have implications. It can also make it much harder to get another funded place, should the student try again. Especially because funding applications can ask about prior funding, and reduce funding awarded as a consequence.

If students really aren't capable, as I understand it (could be wrong) it's OK for universities to get rid of them before upgrade / first year review, but otherwise a dept is judged on the completion rate for ALL not just research council-funded students, so it's in their interests to weed out early. So yes, supervisors do get blamed if they pass a student through the upgrade and that person then doesn't complete.

If you want to leave I think the universities prefer their students to leave at or before the end of their first year (before upgrade to PhD) because if universities have too many incomplete PhDs it would affect their funding. If you leave after the upgrade I dont think they can say you aren't capable otherwise they wouldn't have upgraded you in the first place.