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27 September 2000
Customs and Excise have announced that they are commencing a review of the VAT provisions which relate to the transfer of a business as a going concern. The last major review of these provisions was over ten years ago and it has been decided that a further review would now be appropriate.
Customs have emphasised that they are not open to views about whether the special provisions for transfers of a business as a going concern should be abolished but representations are invited on whether more limited aspects of the provisions should be the subject of a change in the law.
Customs have emphasised that they are not open to views about whether the special provisions for transfers of a business as a going concern should be abolished but representations are invited on whether more limited aspects of the provisions should be the subject of a change in the law.
Customs and Excise have announced that they are commencing a review of the VAT provisions which relate to the transfer of a business as a going concern. The last major review of these provisions was over ten years ago and it has been decided that a further review would now be appropriate.
Customs have emphasised that they are not open to views about whether the special provisions for transfers of a business as a going concern should be abolished but representations are invited on whether more limited aspects of the provisions should be the subject of a change in the law.
Customs also wish to discover whether the published guidance concerning these provisions is clear and sufficiently comprehensive. They also wish to identify problems in complying with the provisions and areas in which the administration of them could be simplified.
Customs state that they are not seeking comments on two areas which are already under challenge. The first relates to the meaning of 'relevant date' for notifying an option to tax on property purchased as part of a transfer of a going concern. This was the subject of an appeal in Higher Education Statistics Agency Ltd v Commissioners of Customs and Excise [2000] STC 332 in which Customs succeeded. The case concerned a purchase of land at a public auction and it was held that the purchaser should have opted to tax the property on the date of the auction in order to have the purchase treated as the transfer of a business as a going concern. This presents the taxpayer in such cases with a highly inconvenient, if not impossible, timescale, but this does not trouble Customs and they do not wish to hear views about it.
The second area where comments are not invited concerns the treatment of costs incurred in the sale of part of a business, where for example the business is sold fully taxable but the remaining business which made the sale is partly exempt. This is the subject of an appeal by Abbey National plc which has been referred to the European Court and Customs suggest that it would be appropriate to wait for the outcome of that case.
Comments on this matter should be sent to Barbara Jover, H M Customs and Excise, HQ Policy Group, Supply of Goods Branch, New King's Beam House, 22 Upper Ground, London SE1 9PJ.
(Source: Customs Business Brief 13/2000 dated 28 September 2000.)
Customs have emphasised that they are not open to views about whether the special provisions for transfers of a business as a going concern should be abolished but representations are invited on whether more limited aspects of the provisions should be the subject of a change in the law.
Customs also wish to discover whether the published guidance concerning these provisions is clear and sufficiently comprehensive. They also wish to identify problems in complying with the provisions and areas in which the administration of them could be simplified.
Customs state that they are not seeking comments on two areas which are already under challenge. The first relates to the meaning of 'relevant date' for notifying an option to tax on property purchased as part of a transfer of a going concern. This was the subject of an appeal in Higher Education Statistics Agency Ltd v Commissioners of Customs and Excise [2000] STC 332 in which Customs succeeded. The case concerned a purchase of land at a public auction and it was held that the purchaser should have opted to tax the property on the date of the auction in order to have the purchase treated as the transfer of a business as a going concern. This presents the taxpayer in such cases with a highly inconvenient, if not impossible, timescale, but this does not trouble Customs and they do not wish to hear views about it.
The second area where comments are not invited concerns the treatment of costs incurred in the sale of part of a business, where for example the business is sold fully taxable but the remaining business which made the sale is partly exempt. This is the subject of an appeal by Abbey National plc which has been referred to the European Court and Customs suggest that it would be appropriate to wait for the outcome of that case.
Comments on this matter should be sent to Barbara Jover, H M Customs and Excise, HQ Policy Group, Supply of Goods Branch, New King's Beam House, 22 Upper Ground, London SE1 9PJ.
(Source: Customs Business Brief 13/2000 dated 28 September 2000.)
