Conditions of a TOGC

A case was presented to the First-Tier Tribunal in relation to the transfer of a business as a going concern (TOGC). In this instance, the transferee was part of a VAT group that only made supplies to another member of that VAT group. The sale of a business is outside the scope of VAT provided it satisfies the TOGC provisions, one of which states that the assets of the business purchased must then be applied to carrying on the same kind of business as before the sale.

Given that intra-group transactions are not a VATable supply this condition was not satisfied and as a result the Tribunal ruled in the favour of HMRC and disallowed the sale of the business as a TOGC.

Whether you are the transferee or the transferor, it is important to establish whether the transfer of a business is as a going concern and therefore whether VAT should be charged on the sale. Due to the detailed conditions that must be met, professional advice should be obtained to ensure the sale is treated correctly for VAT purposes. Call our helpline to discuss any TOGC queries you or your clients may have.

None

Read Next Blog Post

Close
Get in Touch