What is the transfer of a business as a going concern?: Dealing with enquiries from businesses and advisers
VAT is a self-assessed tax, it is a matter for the seller whether VAT should be charged. However the question as to whether a transaction should be treated as a TOGC can present difficulties for the seller due to the conditions imposed on both parties. HMRC will provide clearances where guidance doesn’t cover a particular issue but these may have to be heavily caveated because the enquiry is likely to only come from one party.
HMRC will normally only give a clearance if we receive an enquiry from the seller. If we are contacted by a purchaser we would expect confirmation that the purchaser is enquiring on behalf of the seller as well. Enquirers should be made aware that if a clearance is required, they should allow time for HMRC to consider the information – HMRC will not generally provide an ‘urgent’ clearance in the event of being contacted at the last minute.
When giving a clearance or a decision, HMRC must be in full possession of the facts of the case. The enquirer must specify what aspects of the arrangements give rise to their doubts. It is not HMRC’s policy to ‘vet’ contracts or in any way liaise between parties.
A seller of a property may inquire whether the purchaser has opted to tax the property so that he may determine whether the transaction is a supply for VAT purposes and similarly the purchaser may wish to know if the seller has opted. This should be normally dealt with between the two parties as the Department cannot release confidential information about another business’s tax affairs without his express permission.