VAT—consequences of a transfer of a going concern

The following Tax practice note provides comprehensive and up to date legal information covering:

  • VAT—consequences of a transfer of a going concern
  • Consequences of a transfer of a business being correctly treated as a TOGC
  • Impact of a TOGC on registration
  • Taking on the transferor’s registration number
  • Impact of a TOGC on business records
  • Capital Goods Scheme (CGS)
  • Are the transferor and transferee entitled to recover input VAT on a valid TOGC?
  • Does the right to a VAT refund pass to the transferee on a valid TOGC?
  • What if a transaction fails as a TOGC?
  • Other consequences of failure
  • More...

VAT—consequences of a transfer of a going concern

The conditions for a transfer of a business to be treated as a transfer of a going concern (a TOGC) are set out in Practice Note: VAT—what is a transfer of a business as a going concern?

Broadly if a transfer of a business is a TOGC it is treated as a ‘nothing’ for value added tax (VAT) purposes because a supply does not take place. However, even though this is the case, there are still a number of consequences which need to be borne in mind when providing advice in relation to a TOGC.

This Practice Note deals with the consequences for the buyer (transferee) and seller (transferor) of a transfer of a business:

  1. being correctly treated as a going concern, and

  2. being incorrectly treated (or not treated) as a going concern

This Practice Note includes references to EU case law. The UK ceased to be an EU Member State on 31 January 2020. On this date, the UK entered an implementation period (IP), during which it continued to be treated as a Member State for many purposes, and remained bound by EU law. The IP ended at 11 pm on 31 December 2020 (IP Completion Day). On that date, a body of EU-derived rights and legislation, known as retained EU law, was converted into domestic UK law. For

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