Transfer of undertakings overview

Produced by Tolley in association with Dr John McMullen, Partner, Stone King LLP and Visiting Professor of Law, Durham University
Transfer of undertakings overview

The following Employment Tax guidance note Produced by Tolley in association with Dr John McMullen, Partner, Stone King LLP and Visiting Professor of Law, Durham University provides comprehensive and up to date tax information covering:

  • Transfer of undertakings overview
  • What is TUPE?
  • Brexit
  • When does TUPE apply?
  • What constitutes a business transfer?
  • Retention of identity
  • Definition of undertaking
  • Definition of stable economic entity
  • Assignment
  • What does TUPE transfer?
  • More...

What is TUPE?

The Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246), commonly known as TUPE, have been in force since 6 April 2006. Up until that time the TUPE regime was contained in the Transfer of Undertaking (Protection of Employment) Regulations 1981. The TUPE Regulations were most recently updated in 2014 (SI 2014/16). This guidance note takes in the effect of those latest amendments.

TUPE is based on the European Acquired Rights Directive, 2001/23 concerned with the protection of employees on the transfer of undertakings. This means that:

  1. TUPE could apply whenever a business or individual buys something which has employees. It might look like an asset, or an activity, rather than a business, but TUPE may well protect those employees’ rights

    For example, a shopping centre is likely to have cleaners, security guards or caretakers, whose employment could be transferred to a purchaser when it buys the building. Equally, if someone is taking over the provision of a service, the employees currently providing that service may become those person’s employees

  2. TUPE could apply regardless of who the employees' current employer is

  3. if the rights of those employees are threatened (eg by dismissal or reduction in pay or other rights), it is reasonable to expect that an employment tribunal will try to find that their rights are protected by TUPE

It is not possible to contract out of TUPE, but once the risks and liabilities resulting from it are identified, these can be managed commercially.


The UK negotiated a Withdrawal Agreement and left the EU on 31 January 2020 (referred to as ‘exit day’) with an 11-month implementation period up to 31 December 2020. While exit day was important in terms of being the date the UK ceased to be an EU member state, the majority of key domestic tax and social security changes associated with Brexit take effect from the end of the implementation period (specifically, 11pm (GMT) on 31 December 2020, referred to as

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