The following Tax guidance note Produced in partnership with Cathya Djanogly and Wedlake Bell provides comprehensive and up to date legal information covering:
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:
being correctly treated as a going concern, and
being incorrectly treated (or not treated) as a going concern
Where a transfer of a business is correctly treated as a TOGC, there is no supply of goods or services for VAT purposes and therefore:
the transferor must not charge VAT on the transfer of the assets, and
the transferee will not pay any additional amount in respect of VAT to the transferor
However, the transferee and transferor will still need to consider the following issues:
whether the transferee or transferor needs to register or deregister for
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