TOGC ― VAT recovery

Produced by Tolley

The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • TOGC ― VAT recovery
  • Why is VAT recovery an issue when there is a TOGC?
  • What kinds of costs are associated with a TOGC?
  • What is the VAT recovery position for the seller?
  • What is the VAT recovery position for the purchaser?
  • Practical points ― VAT recovery and TOGCs

TOGC ― VAT recovery

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marked the end of the Brexit transition / implementation period entered into following the UK’s withdrawal from the EU. At this point in time, key transitional arrangements came to an end and significant changes began to take effect across the UK’s VAT and customs regime. This document contains guidance on subjects potentially impacted by these changes. Before continuing your research, see the Brexit — overview guidance note.

This guidance note looks at VAT recovery issues associated with transfers of a going concern (TOGC).

For VAT recovery generally, see the What is input tax? guidance note and for an overview of TOGCs more broadly, see the TOGC ― overview guidance note.

In-depth commentary on the legislation and case law around TOGCs can be found in De Voil Indirect Tax Service V2.226.

Why is VAT recovery an issue when there is a TOGC?

As described in the TOGC ― overview guidance note, a TOGC is neither a supply of goods nor services and is therefore outside the scope of VAT. This raises questions over how to treat any VAT on costs associated with the TOGC.

The treatment of VAT on costs differs slightly for the seller (t

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