Commentary

700/9/18 Transfer of a business as a going concern

Part V8 HMRC Notices
Part V8 HMRC Notices | Commentary

700/9/18 Transfer of a business as a going concern

Part V8 HMRC Notices | Commentary

700/9/18
Transfer of a business as a going concern

December 2018

1 Overview

This notice explains whether the transfer of a business should be treated as a 'transfer of a business as a going concern' (TOGC) for VAT purposes. It also explains the VAT treatment in each circumstance. It will help you ensure that the correct amount of VAT, when chargeable, is properly accounted for and paid.

You should read this notice if you are selling or otherwise transferring a business, or part of a business. It will also be useful if you're acquiring a business. In certain circumstances special TOGC rules apply and the sale will not be treated as a supply for VAT purposes, so no VAT should be charged. To qualify as a TOGC, the assets sold must be both of the following:

  1.  

    •     capable of forming a separate business in their own right

  2.  

    •     used by the purchaser to carry on the same kind of business as that operated by the seller

You can find further information about the application of the TOGC rules in VAT Transfer of a going concern.

1.1 Business and going concern

In this notice, the word 'business' means any continuing activity which is mainly concerned with making supplies to other persons for a consideration. The activity must have a degree of frequency and scale and be continued over a period of time. Isolated transactions are not normally business for VAT purposes.

'Going concern' has the meaning that, at the point in time to which the description applies, the business

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