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HMRC internal manual

VAT Transfer of a going concern

HM Revenue & Customs
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Article 5 VAT (Special Provisions) Order 1995: Has there been the transfer of a business or just a sale of assets?: the business name

The transfer of the business name is the most obvious sign that goodwill has been sold. Previous customers may be drawn to the business largely because it is a name they are familiar with. It will usually mean that the business itself is being transferred and VAT tribunals have attached much weight to this factor. However if the purchaser does not take on the business name of the seller, this on its own does not mean that there has been no TOGC. Indeed, other factors can suggest the transfer of goodwill and/or a TOGC as in ShireEquip Ltd (MAN/83/52).

Shire Equip Ltd argued that the only source of goodwill in a company in liquidation was the business name, which they had not taken over. The tribunal found that as both companies had common directors, the new company had acquired all relevant knowledge about customers and therefore there was no need to transfer the name to get the goodwill.