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TOGC ahead!
Key points
- A business sale if treated as a transfer of a going concern is outside the scope of VAT.
- Examples of when the transfer of a going concern provisions might apply in a business context.
- HMRC’s VAT Notice 700/9 has a useful list of the conditions for a TOGC.
- Problems may arise when standard-rated land forms part of the transfer.
- Generally the seller’s costs are treated as general business overheads.
- VAT will be recoverable by the purchaser on costs if the assets are used to make taxable supplies.
A topic tested quite frequently in the Association of Taxation Technicians paper 6 (VAT) examination is that of a business being transferred as a going concern commonly referred to as a TOGC. The subject...
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