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Turnover torment
Key points
- Are the TOGC rules relevant if the transferor business is not registered?
- Under the ‘backward look’ test in VATA 1994 s 49 sales by the business before transfer are treated as the transferee’s sales.
- The VAT (Special Provisions) Order SI 1268/95 art 5 provides for TOGC treatment to a person.
- The aim of s 49 on the sale or transfer of a non-registered business is to prevent registration avoidance.
- HMRC has been asked for its policy and the legislative basis when an unregistered sole trader incorporates.
Those who work in VAT will be familiar with the question of whether the transfer of a going concern (TOGC) rules apply when a VAT registered business or part of that business is sold or incorporated. But what happens when the business is not registered because it is below the VAT threshold? Do we still need to worry...
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