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VAT deregistration and output tax for poorly trading restaurant.
I act for a restaurant that has traded very badly and can now deregister from VAT because of reduced sales.
However my client took over the business as a going concern four years ago and the transfer of assets from the previous owner included the freehold property from which the business trades goodwill stock and furniture and fittings.
As I understand it no option-to-tax election has been made on the property by either my client or the previous owner. The property is now worth about £100 000.
My first thought is that no output tax will be due on the final VAT return on any assets acquired when the business was purchased and still owned because my client obviously did not claim any input tax because of the transfer of a going concern rules. In other words the proceeds were outside the scope...
