TOGCs and VAT groups

By Tolley

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

  • TOGCs and VAT groups
  • VAT treatment of transfers
  • Intelligent Managed Services decision
  • Partly exempt VAT groups
  • Points to consider

This guidance note covers the main VAT treatment of a TOGC involving VAT groups. This note should be read in conjunction with the Overview of a transfer of a business as a going concern and Transferring land and property as part of a TOGC guidance notes.

VTOGC5000; VATA 1994, s 43(1); Value Added Tax (Special Provisions) Order 1995, SI 1995/1268, Article 5; HMRC Notice 700/9 
VAT treatment of transfers

The following table provides an overview of the VAT treatment of transfers of trade and assets where VAT groups are involved in the transaction. HMRC has amended its guidance on the correct VAT treatment in light of the Intelligent Managed Services decision (see below) and the table below has been updated accordingly:

TransactionVAT treatment
Transfers between members of the same VAT groupThe transfer of any assets between members of the same VAT group is disregarded for VAT purposes. However, this does not mean that the members of the group as not businesses if they only make supplies between group members. Therefore, if a business or part of a business that is capable of separate operation, is transferred between group members, then this can be treated as an ongoing business activity providing that business is used to make supplies to customers outside of the VAT group as well

More on Transfer of a business as a going concern: